America and the Era of the Great Depression
America and The Era of the Great Depression The Great Depression was a time of difficulty and stress for everyone. It was the biggest slump the economy had ever faced. The depression had adverse effects on the entire country. The stock market was disarrayed and people were chaotic. People were jobless and bankrupt forcing the economy to fall to shambles. Market crashes and the maldistribution of wealth, caused the American economy to decline. The end of World War I welcomed a period of prosperity, which however resulted in the greatest recession the country has ever come across. Around 1922 the economy was booming. President Harding allowed taxes and federal spending to be cut. After President Harding's term was over Calving Coolidge stepped up, who proved to have a soft spot for business. Not only did he refuse to investigate monopolies but also chopped taxes for those who had high incomes with very little cuts for middle incomes. In 1924, after a decline in business, Reserve Banks created over $500 million in new money. Due to the fiscal policies, banks could lend over $4 billion. This humongous credit expansion was a great factor that led to the stock market crash in 1929 and the depression.
I believe that President Coolidge's performance as president with his policies of placing business first also contributed to the downfall of the economy. 4 percent that year and unemployed had reached a devastating 23. The share of wealth and income grew wider between the rich and the middle class all throughout the 1920's. By 1932, which was by far the worst year of the depression, the economy was in terrible condition. The chief indicator of the economy was viewed as the stock market, causing the confidence of the America people to be destroyed. Sell orders flooded market exchanges. The stock market crash was inevitable and the depression was inescapable. (Hicks 114) President Coolidge's tactics were to start a flow of money and easy credit to boost the economy. Therefore as production costs decreased, wages rose gradually, prices remained constant, and the bulk benefit of the increased productivity went into corporate profits. Roosevelt feared an unbalanced budget because of heavy government spending would cause the economy to again decline. 7 percent and the unemployment finally fell to 21.
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