Great Depression Essay

1122 words - 5 pages

The Great Depression is an event in our nation's history that dramatically changed the lives of America’s people in the 1930s and beyond. After a decade of excess, prosperity and happiness, the Depression threw our nation into a spiraling decline, the likes of which we had never seen. Hints of these difficult times have been experienced again more recently as our country battled through the Great Recession. A number of similarities and differences between the Depression of the 1930s and the Recession of the late 2000s decade are noteworthy.
The Great Depression altered American social fabric in the 1930s greatly. With unemployment peaking at 25% in 1933 (Beyer), a large percentage of people ...view middle of the document...

In addition, the farmers who were rarely affected by changes in the financial markets, were at the same time being hit by a devastating drought which further added to the misery Americans were feeling. On the social level, the 1920s were a carefree and entertaining time in which to live. Speakeasies, movies, jazz clubs, and commercial radio were commonly used to immerse oneself in the diverse culture of this time period. However, by the 1930s, people found themselves with little money for extraneous activities. In addition, people who were lucky enough to find work were often working multiple jobs just to make ends meet. In general, during the 1920’s there was a sense of national pride that pervaded society. In contrast, during the Depression, people were fed up with Herbert Hoover and national pride plummeted because, but for a miniscule percentage of the population, American was not a good place to live. This comparison between the social and economic fabric of our nation during the 1920s and 1930s show how a severe financial crisis can wreak havoc on our our country.
There are many similarities and differences between The Great Depression of the 1930’s and the Great Recession of this century. The Great Depression, just like the current Great Recession, began with an economic bubble. In the case of the Depression, the fall of the stock market precipitated the economic disaster. In the case of the Recession, it was the housing market bubble which resulted in an economic downturn. Furthermore, there was little government regulation for both stock and housing investments. During the Great Depression, investors could easily buy stocks on margin, or borrow money from banks to buy stocks. Banks guaranteed the margin loans and foolishly accepted the risks. On Black Tuesday, so many investors tried to withdraw their stocks that the banks ran out of money. Before the Great Recession, the Carter administration ratified legislation to support homeownership for all citizens. The government encouraged mortgage providers along with the Federal Housing Authority to issue sub-prime loans to people without down-payments and a lower credit risk (Johnson). When housing prices dropped significantly these mortgage holders could no longer afford their monthly payments and the system collapsed. Banks were left owning homes as people found themselves in debt and sometimes homeless. Thus in...

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