What were the causes of the Great Depression and how did it impact people?

Answer 1

These are very complex questions that require several volumes to answer adequately. A short answer goes something like this:

The Great Depression was the result of a series of mistakes by the federal government...starting with the Federal Reserve Act of 1913. After artificially inflating the money supply during the "roaring 20's" the FED put the breaks on in 1929...cutting the money supply by one third. That sent the economy into a tail spin. Normally in such circumstances the government would do nothing and the economy would self-correct in a year or two. But this time Presidents Hoover and Roosevelt decided to intervene. Hoover raised taxes and supported a huge tariff on imported goods...starting a trade war. Roosevelt also raised taxes and supported all sorts of new government spending programs, regulations and limitations on the economy. All of these things kept the economy from self-correcting. The depression started in the US and spread around the world (partly because of the tariff act). But in countries where government did NOT intervene in the economy...the downturn never went from a "depression" into a "Great Depression".

Many economists say that the Great Depression ended in 1939 when orders for war supplies started pouring in from Europe. But another theory gaining in popularity is that the Great Depression actually ended in 1946 when taxes, regulations and government spending were drastically reduced. That is when people's standard of living actually started to rise again (as opposed to wartime when we were building tanks, ships and bombs).

Answer 2

The major accomplishment of the New Deal was to ease the economic hardships felt by most during the Great Depression. This preserved confidence in the American institutions and averted any attempts to radically change our basic economic and political structure. The relief measures of the New Deal did put people to work. But the New Deal failed in its attempt to achieve a complete economic recovery. The recession of 1937 was proof that the New Dealers had not unlocked the secrets of maintaining economic prosperity during peacetime. Only when the nation began to prepare for World War II, along with massive purchases of American goods from abroad (and American rearmament), did the Great Depression come to an end. By 1939 the economy was on an upswing and by 1940, after war had begun in Europe, the Great Depression was history.

Answer 3

This is a complex issue. Note that Karl Marx did a brilliant analysis of this in his book Das Kapital. In short, free market economics make possible positive feedback cycles by which either upward or downward trends become self-reinforcing. In the case of the Great Depression, there were other influences as well, notably Prohibition, which removed a large section of the legal economy (transferring it to the black market) concerning the manufacture and sale of Alcoholic Beverages. The results were also many, including a great deal of poverty and hardship for many people, and a move toward socialism, which began with the New Deal policies of FDR and which continue in various forms to this day.

Answer 4

The Great Depression was caused mainly by the Stock Market crashing. A lot of people had invested money into them not really knowing how they worked. People lost jobs, therefore, they lost money. Prices went up on everything and it made it harder to take care of your family. Many people went homeless, without food or shelter.

Answer 5

building guns, tanks, and machinery for World War 2 got us out of the depression. when the economy dropped the depression started.