The Great Depression:
The Great Depression:
• Lasted from 1929 to 1940
• There was many reasons for the depression
• Too much buying on credit, many people borrowed more than they could affored
The Great Depression was a time where the U.S. economy was in bad condition and it was the worst it has ever been. There wasn't one main thing that caused the terrible event, a lot more events basically led into the Great Depression. The Stock Market Crash in 1929 was the most known thing to the depression. During the period of 1929-1940, more and more banks closed because of the scramble of people taking more money, afraid it would disappear if they didn't.
Within that time, there were more plans and better advertisement that been made that caused Americans to have the, buy now, pay later, mindset. Some thought this was a good opportunity but it actually left many without money. Since they couldn't actually see the money they were spending, they went in debt. The fact that a lot were participating in the new buying technique, this basically lead to America's economic decline as well.
When the government was trying to make the people think that everything would be good, but if the citizens found out the hard way that the success they promised was actually not true at all. Only the richest was giving and getting more money then they had ever got before the crisis begun. The middle class and lower class barely got any additional income. And the unemployment rate still go to dangerously escalate (from 1929 3.2% to 1939 17.2%).
President Franklin D. Roosevelt was elected president in 1932 and created the New Deal in his first 100 days of office. The new deal was made to help America recover from the depression. The new deal was relief, recovery, and reform.
Relief: was to provide temporary help to suffering and unemployed Americans.
Examples:
1. CCC & WPA: President Franklin set up the Civilian Conservation Corps, which was the CCC, and the Works Progress Administration, which was the WPA to give jobs to loads of unemployed Americans and to simulate the economy. The WPA and CCC built more than 650,000 miles of roads as well as 150,000 schools, airports, hospitals, parks, dams, etc., many of which are still in use today.
2. Social Security Act: It was a law enacted in 1935 to give aid and financial security to retirees, the unemployed, people with disabilities, and dependent mothers with children. During the depression, about 50% of senior citizens lived in need. Like many Americans appalled at the sight of fellow citizens living their final years in poverty after a lifetime of hard work, FDR believed that a nation as prosperous and advanced as the U.S. should not allow retired citizens to suffer poverty. It protects citizens from poverty during retirement, and provides temporary relief for involuntary unemployed Americans and families seeking new jobs- a program known as Unemployment Insurance. The funds for Social Security are collected from every paycheck-worker and employers split the tax contributions that the government collects. After age 62, citizen's receive a monthly pension check back from the government.
Recovery was designed to help the economy bounce back from depression.
Examples:
3. Agricultural Act: Several measures were introduced to arrest the fall in agricultural prices that had been causing hardship in the country's farming industry. The first Agricultural Adjustment Act, which was passed on May 12, 1933, created the Agricultural Adjustment Administration. This agency negotiated restrictions on the production of corn, cotton, dairy products, hogs, rice, tobacco, and wheat, and compensated farmers for the crops and livestock that they did not produce from funds raised by a tax on food processing. Since the law went into effect after the 1933 crops had been sown and animals born, the agency had to order that crops be destroyed and livestock slaughtered in order to meet the 1933 production restrictions. In 1935, the Supreme Court in United States v. Butler ruled the Agricultural Adjustment Act unconstitutional for having one segment of the population directly supported by taxes paid by a different segment. But as this program was working to improve farm profitability, Roosevelt and Congress rewrote the law to meet the Court's scruples. During the program's first three years because of the restrictions on supply, food prices rose and farm incomes increased significantly. The Agricultural Adjustment Act has not been repealed by Congress and has been many times amended, the latest being in the 1990s.
2. The National Industrial Recovery Act: The 1933 National Industrial Recovery Act was the federal government’s first attempt to revive the economy as a whole. The bill created the National Recovery Administration (NRA) to stimulate industrial production and improve competition by drafting corporate codes of conduct. The NRA also sought to limit production of consumer goods to drive up prices. Furthermore, the act helped set up the Public Works Administration (PWA) to construct public roads, bridges, and buildings. In accordance with Keynesian economic theories, Roosevelt believed that improving the public infrastructure would put more money into the economy.
Reforms targeted the causes of the depression and sought to prevent a crisis like it from happening again.
-Examples:
1. FDIC & Back Reform: When Hoover left office, banks were failing everyday across the nation. Roosevelt and Congress immediately passed emergency legislation to solve the banking crisis. FDR closed all nations' banks so that the Federal Reserve could help strengthen them and restore confidence in the banking system. The FDIC (Federal Deposit Insurance Corporation) was created. This meant that the government guaranteed savings deposits for all Americans. This allowed all citizens to trust private banks. When banks failed, Americans were guaranteed that they would not lose all of their savings and prevented future banking "panics".
2. SEC- Stock Market Reform: The SEC (Securities and Exchange Commission) was setup to regulate Wall Street and the stock market exchanges. The agency was created to prevent fraud and abuse in the stock markets by banks and corporations. The agency enforces regulations to protect investors from illegal financial activities by banks and corporations.
• Lasted from 1929 to 1940
• There was many reasons for the depression
• Too much buying on credit, many people borrowed more than they could affored
The Great Depression was a time where the U.S. economy was in bad condition and it was the worst it has ever been. There wasn't one main thing that caused the terrible event, a lot more events basically led into the Great Depression. The Stock Market Crash in 1929 was the most known thing to the depression. During the period of 1929-1940, more and more banks closed because of the scramble of people taking more money, afraid it would disappear if they didn't.
Within that time, there were more plans and better advertisement that been made that caused Americans to have the, buy now, pay later, mindset. Some thought this was a good opportunity but it actually left many without money. Since they couldn't actually see the money they were spending, they went in debt. The fact that a lot were participating in the new buying technique, this basically lead to America's economic decline as well.
When the government was trying to make the people think that everything would be good, but if the citizens found out the hard way that the success they promised was actually not true at all. Only the richest was giving and getting more money then they had ever got before the crisis begun. The middle class and lower class barely got any additional income. And the unemployment rate still go to dangerously escalate (from 1929 3.2% to 1939 17.2%).
President Franklin D. Roosevelt was elected president in 1932 and created the New Deal in his first 100 days of office. The new deal was made to help America recover from the depression. The new deal was relief, recovery, and reform.
Relief: was to provide temporary help to suffering and unemployed Americans.
Examples:
1. CCC & WPA: President Franklin set up the Civilian Conservation Corps, which was the CCC, and the Works Progress Administration, which was the WPA to give jobs to loads of unemployed Americans and to simulate the economy. The WPA and CCC built more than 650,000 miles of roads as well as 150,000 schools, airports, hospitals, parks, dams, etc., many of which are still in use today.
2. Social Security Act: It was a law enacted in 1935 to give aid and financial security to retirees, the unemployed, people with disabilities, and dependent mothers with children. During the depression, about 50% of senior citizens lived in need. Like many Americans appalled at the sight of fellow citizens living their final years in poverty after a lifetime of hard work, FDR believed that a nation as prosperous and advanced as the U.S. should not allow retired citizens to suffer poverty. It protects citizens from poverty during retirement, and provides temporary relief for involuntary unemployed Americans and families seeking new jobs- a program known as Unemployment Insurance. The funds for Social Security are collected from every paycheck-worker and employers split the tax contributions that the government collects. After age 62, citizen's receive a monthly pension check back from the government.
Recovery was designed to help the economy bounce back from depression.
Examples:
3. Agricultural Act: Several measures were introduced to arrest the fall in agricultural prices that had been causing hardship in the country's farming industry. The first Agricultural Adjustment Act, which was passed on May 12, 1933, created the Agricultural Adjustment Administration. This agency negotiated restrictions on the production of corn, cotton, dairy products, hogs, rice, tobacco, and wheat, and compensated farmers for the crops and livestock that they did not produce from funds raised by a tax on food processing. Since the law went into effect after the 1933 crops had been sown and animals born, the agency had to order that crops be destroyed and livestock slaughtered in order to meet the 1933 production restrictions. In 1935, the Supreme Court in United States v. Butler ruled the Agricultural Adjustment Act unconstitutional for having one segment of the population directly supported by taxes paid by a different segment. But as this program was working to improve farm profitability, Roosevelt and Congress rewrote the law to meet the Court's scruples. During the program's first three years because of the restrictions on supply, food prices rose and farm incomes increased significantly. The Agricultural Adjustment Act has not been repealed by Congress and has been many times amended, the latest being in the 1990s.
2. The National Industrial Recovery Act: The 1933 National Industrial Recovery Act was the federal government’s first attempt to revive the economy as a whole. The bill created the National Recovery Administration (NRA) to stimulate industrial production and improve competition by drafting corporate codes of conduct. The NRA also sought to limit production of consumer goods to drive up prices. Furthermore, the act helped set up the Public Works Administration (PWA) to construct public roads, bridges, and buildings. In accordance with Keynesian economic theories, Roosevelt believed that improving the public infrastructure would put more money into the economy.
Reforms targeted the causes of the depression and sought to prevent a crisis like it from happening again.
-Examples:
1. FDIC & Back Reform: When Hoover left office, banks were failing everyday across the nation. Roosevelt and Congress immediately passed emergency legislation to solve the banking crisis. FDR closed all nations' banks so that the Federal Reserve could help strengthen them and restore confidence in the banking system. The FDIC (Federal Deposit Insurance Corporation) was created. This meant that the government guaranteed savings deposits for all Americans. This allowed all citizens to trust private banks. When banks failed, Americans were guaranteed that they would not lose all of their savings and prevented future banking "panics".
2. SEC- Stock Market Reform: The SEC (Securities and Exchange Commission) was setup to regulate Wall Street and the stock market exchanges. The agency was created to prevent fraud and abuse in the stock markets by banks and corporations. The agency enforces regulations to protect investors from illegal financial activities by banks and corporations.