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I am sure you meant "Great" Depression but, semantics aside, there were several reasons for the long term decrease in GDP not only in the United States but worldwide.
1) Think of the 1920's America as you would the years 1995-2008. Credit was abundant, technology brought us the Model T, motorcycles, washing machines, etc. and people just had to have them so they borrowed money in which to buy them. We had just taken part of the victory in WWI so confidence was overflowing and people were borrowing and spending money in a frenzy (sounds familiar to today's economy, huh?) Hence, the 1920's were called the "Roaring Twenties!" Naturally, at some time, bills have to be paid and if there is no money in which to pay them, there is a ripple effect.
2) Behind the Scenes, there were some trade imbalances with other nations(cheap imports) so two representatives (who were either VERY ignorant in economics, overconfident in America's strength, or both) decided to so something about it and increase the tariffs on imported goods. The passing of the Smoot-Hawley act is considered to be the prime flash point of the "Great Depression" as other countries decided to get just as punitive and worldwide trade ground to a halt. On top of all of this...
3) People had overspent and over speculated in investments and with trade depleted, so went the jobs that were affiliated with them and people became very nervous. So much so that banks were "calling their loans" (telling borrowers that they wanted all of their money that was owed NOW!). Naturally, with no ability to pay, jobs disappearing, and a host of other factors caused a quite severe slowdown in production and spending by consumers. As America was the largest single economy at the time, its negative impact spread to other nations (who were equally as guilty for doing many of the same things) and voila! A great depression (actually, a very prolonged recession) had begun.
With history as a context, many people foresaw the economy of the United States taking a downturn because history was just repeating itself and took measures beforehand. As well, the massive government spending during the 1920-1938 years really harmed America and drug the recession out even more, which is why a great deal of America's population disagree with the massive spending and appeasement of the current president, Obama.
What else can I help you with?
What caused the quiet depression in agriculture during the 1920?
The farm depression was caused because of agricultural failure of many crops which forced farmers to begin selling what other almost non-profitable crops which they had little of to markets and a lot of them lost a lot of money trying to restore the failed crops. This caused little farm goods to be accumulating in markets which made citizens spend less money which led up to the Great Depression.
Why was the 1920's so bad?
because the united states was going through the great depression people were poor and starving many of them in the streets
What decade was the Great Depression?
It was in the 1920's. It started in 1920 and ended in 1929!
Which economic trend of the 1920's helped cause the Great Depression?
The major economic trend of the 1920s that helped caused the Great Depression was likely the unequal distribution of wealth. Another factor was over speculation in the stock market.
How long did the great depression of the 1920's last?
till the late forties
How do you use the word parallel in sentence?
the great depression of the USA is parallel to what the Germans went through in the 1920's. :)
Why did the US economy collapse in 1920?
The United States economy was in recession due to the spending of World War I during the 1920s. This caused the Depression where there was a decline in real products.
What caused the quiet depression in agriculture during the 1920?
The farm depression was caused because of agricultural failure of many crops which forced farmers to begin selling what other almost non-profitable crops which they had little of to markets and a lot of them lost a lot of money trying to restore the failed crops. This caused little farm goods to be accumulating in markets which made citizens spend less money which led up to the Great Depression.
Why was the 1920's so bad?
because the united states was going through the great depression people were poor and starving many of them in the streets
What was the era from 1920 to 1940 called in England?
The Depression
Reasons for poverty in the 1920?
After the first world war, there was the Depression
What was the impact of the republican government of the 1920's?
The Great Depression
What are the happenings in 1920?
One thing is the great depression occured
What decade was the Great Depression?
It was in the 1920's. It started in 1920 and ended in 1929!
What where families like in the 1920's?
hard because of the depression ^ nope the depression was in the 1930's not 20's ..
Which group experienced an early depression in the 1920?
the farmers.
Which economic trend of the 1920's helped cause the Great Depression?
The major economic trend of the 1920s that helped caused the Great Depression was likely the unequal distribution of wealth. Another factor was over speculation in the stock market.
