The Great Depression and the New Deal
The Great Depression rocked the United States to its very core. Since that event occurred the American public has lived in fear that another depression would eventually sweep the nation. Many measures have been put in place to insure that does not happen. The causes of the Great Depression lined up like stars in the universe to create the crash that it did. One of the things that made the Great Depression so shocking to the United States public was that the years before it hit there had been a boom in the stock market across the board. This boom caused an optimism in business and economists believed that the brand new Federal Reserve would work to stabilize the United States economy. There was also a belief that rising technology was going to raise the living standards and expand many of the markets that had been previously untapped(The Great Depression in Outlinehttp://econ161.berkeley.edu/TCEH/Slouch_Crash14.html). When a recession started they were shocked and began cutting back on purchases which of course this lowered the need for product
FDR took office and decided to take the bull by the horns to turn the depression around and get America back on its feet. There seemed to be no rhyme or reason to its runaway status. "A range of evidence suggests that at the market peak in September 1929 something like forty percent of stock market values were pure air: prices above fundamental values for no reason other than that a wide cross-section of investors thought that the stock market would go up because it had gone up(The Great Depression in Outlinehttp://econ161. The banks of course had the cash loaned out to various places and could not meet the demand which started a panic across the nation. This created another panic in which people made more efforts to take their cash from the banks. "It seemed better to the Federal Reserve in 1928 and 1929 to try to "cool off" the market by making borrowing money for stock speculation difficult and costly by raising interest rates. The Great Depression however, made the public realize that nothing economically is certain and there is always going to be an underlying fear that it could happen again. They accepted the risk that the increase in interest rates might bring on the recession that they hoped could be avoided if the market could be "cooled off": all policy options seemed to have possible unfavorable consequences. " His plan worked and the nation began to climb out of the nose dive it had been experiencing since the stock market crash had begun. In something called the New Deal he proposed and implemented huge changes that swept across the economic policies and practices of the nation like nothing had done before(Fresh Debate About FDR's New Deal https://www. " The stock market crash created a panic in the American public. " The United States stock market had expanded in historic measures during the decade leading to the Great Depression.
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