My parents went through the Great Depression and so did my older sister. I can remember my mother telling me stories about how my father could not get work. My sister was born in 1932 and was a baby during this time. It was a terrible time for families and people that survived never forgot the hardship.
My mother saved everything she ever came in contact with from then on and my sister is almost as bad!
The Great Depression was the worst economic slump ever in U.S. history. The cause is still a matter of debate today. Some believe the collapse of the stock market in October 1929 played a major role. Two months later, stockholders had lost more than $40 billion dollars. Some of the nation's largest banks were failing to maintain adequate reserves and were investing heavily in the stock market or making risky loans. Bank deposits were uninsured and when the banks failed, people lost their savings.
People from all classes stopped buying. This caused less items to be produced which led to a reduction in the workforce and less jobs. Millions of Americans were jobless, homeless, and penniless. The number of commercial banks failing between 1929 and 1933 was 10,763.
America had lent large amounts of money to Europe and UK, to help rebuild after the first world war. Therefore, the U.S. economy spread to the rest of the world as America called in loans.
Some say the end of the Great Depression came in December 1941 when America became involved in World War II and nations increased their productions of war materials. This provided jobs and put money back into circulation. The government under Franklin Roosevelt took over the responsibility for the elderly with the creation of Social Security. Unemployment compensation was created for those involuntarily unemployed. The Federal Deposit Insurance Corporation (FDIC) helped to restore confidence in banks. Several other bills provided mortgage relief for homeowners. This changed the relationship between the government and the people as they came to expect and accept a larger federal role in their lives and the economy.
The more I read about the Great Depression the more our situation seems to coincide with the events of that time in our history. The 1920s "boom" and then the stock market crash.
President Herbert Hoover supposedly did nothing about the Depression. George W. Bush did nothing to prepare the American people for what we are going through today.
The definition of recession is: a period of reduced economic activity. The definition of depression is: a severe economic downturn that lasts several years.
What do you think about the situation the American people are facing? Are we in a recession or a depression? Do you think things are going to get worse before they get better? What are your thoughts about the bailout?
On a lighter note, two famous songs during the Depression: Brother, Can You Spare Me A Dime and Mr. President Have Pity On The Working Man.
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