America's Debt Structure

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Recommended: Economic impacts of the great depression

Several factors contributed to the Great Depression. A few being maldistribution of purchasing power, the credit structure of the economy and America's debt structure.The Great Depression can be considered inevitable due to the fact that there was no primary reason for the cause of the Great Depression, but many components played a role. America's horrible diversification in purchasing power was just one reason why the Great Depression occurred. During the late 1920s, America's automobile and construction industries began to plummet. This became an issue since the two industries largely contributed to the prospering economy. Spending on construction fell from $11 million to $9 million dollars, from 1926 to 1929. Within nine months, …show more content…

European countries had trouble paying off the money they owed America at the end of World War I in 1918. Germany and Austria were required to pay reparations, which allowed the European countries to pay off some of their debt, but not enough. American decided, instead of forgiving or minimizing the debt, they would offer loans to pay it off. As a result, larger loans were formed and foreign countries could not even use international trade as a tactic to reduce the loans because of the tariffs America implemented. Also, European industries were very productive in the 1920s, therefore, the demand for American products decreased. Without international trade, European countries would enter into the Depression as well. The debt structure was definitely a cause of the Great Depression, but it resulted from the war and lack of international trade. It is evident that the great depression was inevitable since there were several components that contributed to the various causes of the Great Depression. Maldistribution of purchasing power was a factor of the Great Depression, which occurred because of the market crash. While the credit structure was due to consumers not ameliorating loans, and the debt structure from the war and lack of international trade. All of these elements lead to the Depression in

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