Great Depression

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The Great Depression is probably one of the most misunderstood events in American history. It is routinely cited, as proof that unregulated capitalism is not the best in the world, and that only a massive welfare state, huge amounts of economic regulation, and other interventions can save capitalism from itself. The Great Depression had important consequences and was a devastating event in America, however many good policies and programs became available as a result of the great depression, some of which exist even today.

When the stock market crashed in October 1929, the nation plummeted into a major depression. An economic catastrophe of major proportions had been building for years. The worldwide demand for agricultural goods during World War I vanished after the war and rural America experienced a severe depression throughout most of the 1920s. This lead to banks foreclosing farm mortgages and by the early 1930s thousands upon thousands of American farmers were out of business. The U.S. economy was superficial and shallow. Major businesses increased profits through most of the decade while wages remained low and workers were unable to buy the goods they had helped to produce. The financial and banking systems were very unregulated and a number of banks had failed during the 1920s. The construction and automotive industries, whose booming business had been made possible by the prosperity earlier in the decade, slowed. Declining sales resulted in higher rates of unemployment.

America was witnessing a breakdown of the Democratic and free enterprise system as the US fell into the worst depression in history. The economic depression that beset the United States and other countries was u...

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... many people to turn against New Deal policies. In addition, The United States entered World War II in December of 1941, the year generally considered to be the end of the Great Depression, causing an enormous growth in the economy as war goods were once again in great demand. No major New Deal legislation was enacted after 1938.

However one good thing remained. The welfare programs of the Great Depression changed American values forever. As a result of the great depression people everywhere were raised learning never to accept anything they didn't work for. After the Great Depression, government action, whether in the form of taxation, industrial regulation, public works, social insurance, social-welfare services, or deficit spending, came to assume a principal role in ensuring economic stability in most industrial nations with market economies.

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