Many people scrutinize FDR for his tactics and ideas. For example, citizens look at Uncle Sam as a symbol of freedom and prosperity, but when critics released a political cartoon (Doc F), showing Uncle Sam being tied down by the many organizations that FDR created, their views quickly changed. Some Americans realized that his organizations were hindering the nation and causing the market to slow down (Doc E) while others believed his organizations were the core of the nation’s debt. When a great deal of money is spent by the government, the only way to get it back is through taxes. Since FDR did not raise taxes and continued to spend money, America’s citizens got out of debt while the governments’ debt got steeper.
With the banks relying on the circulation of money and people not needing all of their money all at once, the banks started to go bankrupt as they did not have enough money to give back everyone the money they have in the bank. The closing of banks started a blitz to get money from the banks before they closed due to not having enough money. These were a big part of the great depression and a major reason to the unemployment during this time. GML pg 849 The Presidents during this time were Hoover and Roosevelt and they both used very different tactics to combat the growing deficit in our nation's economics. With the troubling times came troubling problems that perplexed our nation’s government and forced them to deal with unforeseen circumstances that they were not accustomed to.
Other factors causing the Great Depression includes the over-expansion of businesses to gain more profit. In fact, as businesses over-extended themselves, produced too much products, customers could not keep up with the expansion, since their wages did not increase much. Many desperate customers, wanting to buy "on-time" with their limits income, plunged into the world of credit. Further, the whole economic system was dictated largely by jumbo corporations, the government, most of the time, stayed out of the system. Responding to the Great Depression, President Herbert, during 1931-32 believed that private charities had run out of all funds.
He decided to put government money into businesses so they can employ people who, in turn, spend money on goods and services, therefor creating employment for additional people to supply this increased demand. This cycle then continued and gradually brought down unemployment. The previous president, Hoover, believed in a very different method, which involved, letting the trouble sort itself out without government intrusion. This system is known as Laissez-faire government, and it did not work for Hoover at that time. Roosevelt's method however, did appear to succeed.
This was where you would buy lots of stocks with a loan, then way for them to rise slightly, and sell them off again, making a quick and easy profit. Many banks got involved in speculation, but people started to lose faith in the stock market, so everyone started to sell their shares. This meant that there were much more sellers than buyers which meant the whole system crashed. This caused banks to go bankrupt, along with everyone's money that were in those banks. This caused people to withdraw their savings from banks, causing even more to close down.
While businessmen maintained wage levels temporarily, they cut back on the number of their employees because of dropping consumption levels. Hoover also failed in his confidence campaign to convince consumers to keep purchasing. Seeing other workers laid off and fearing for their own future, labourers cut back on purchases thus guaranteeing further layoffs. Hoovers negligence towards his responsibility as the president of a struggling country was his first failure in recovering the economic ... ... middle of paper ... ... let alone pay them. This left America income free in their time of economic downfall.
October 29th, 1929 marked the beginning of the Great Depression, a depression that forever changed the United States of America. The Stock Market collapse was unavoidable considering the lavish life style of the 1920’s. Some of the ominous signs leading up to the crash was that there was a high unemployment rate, automobile sales were down, and many farms were failing. Consumerism played a key role in the Stock Market Crash of 1929 because Americans speculated on the stocks hoping they would grow in their favor. They would invest in these stocks at a low rate which gave them a false sense of wealth causing them to invest in even more stocks at the same low rate.
On October 24, a record 12,894,650 shares were traded. Investment companies and leading bankers attempted to stabilize the market by buying up great blocks of stock. On Tuesday, the stock prices collapsed completely” ("Stock Market Crashes"). Thousands of people were invested in these stocks and they lost millions of dollars because of the crash. The Stock Market Crash triggered a banking crisis, business failures and trouble overseas.
Then in October that’s when the stock market crash that changed history. The crash sparked a chain reaction. First banks demanded that costumers pay back the money they had to borrow the buy stock. When people could not repay these loans the banks ran short of money. Fearing that banks would close, customers lined up to withdraw their money.
These programs worked to keep people on their feet until America pulled out of the deep recession. The New Deal was not liberal because it was not even what ended the Great Depression. What actually ended the Great Depression was when World War II began trickling over into American affairs. The spending that came along with the war and the demand for new industries greatly improved the economy along with the actions taken to finance these investments. There are always critics to any program or plan that the government creates and the New Deal was no exception; FDR had the good intentions of America in mind.