Are you prepared if we have to enter another Great Depression again? Many people take for granted the opportunities to walk into a store to purchase goods and services such as clothes, food, gas, laundry soap, shampoo, computers, phones, cars, etc… Opportunities to walk into a restaurant to dine in or order fast food any time we want. But what if all that came to a halt? Anything can push the United States of America into a Great Depression again. We are talking about a war, terror attack, and 11major climatic storm changes. How will you respond to a Great Depression if it hits? I will show you the last Great Depression and the effects it had on the United States of America, why, how, when it happened, how it affected people, and what the resolution was.
First, let us look at when The Great Depression happened. The Great Depression happened in the year of 1929 and lasted for 12 years until the year 1941. Before the Great Depression started the world was good, with goods and services was booming. The stock market was a good market. Businesses were prospering such as the music industry, manufacturing companies, financial institutions were popping up all over, and people were investing their money in the stock market. Interest rates were kept low because of the money supply was increasing. Life was grand.
Secondly, the GDP (Gross Domestic Product), the volume of goods and services output was growing. Consumer spending was at an all time high. Many inventions were popping up such as the signal lights, rockets, growth in medicines. The unemployment rate was low and the United States was at Full Employment. The government was only spending what it took in tax revenues. Then all of a sudden ...
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... government did not listen. The government failed to increase the money supply. The price of services and goods dropped and banks failed. This led to deflation. Even though the government held the gold reserves thinking it would be enough to cover the money that the people who lost money to the banking system.
In 1937–38 the United States suffered another severe downturn, but after mid-1938 the American economy grew even more rapidly than in the mid-1930s. The country’s output finally returned to its long-run trend path in 1942, as you will see in Figure 2 (Real GDP graph, web, 2004).
Figure 2: Real GDP of the Great Depression, web 2004.
In closing, That was the Great Depression in a nutshell. Why, how, when it happened, how it affected people, and what the resolution was. I ask you again, Are you prepared and ready if another Great Depression were to happen?
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