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The Great Depression Main Causes, Impact On The Economy, Solving The Depression, And Lessons Learned. Works Cited Included

3273 words - 13 pages

IntroductionLike us, many of you had a loved one that lived during the Great Depression. Many of us have heard stories from our parents or grandparents of the horrific times of the depression; stories that told us how hard it was to find a job, put food on the table, and to provide shelter for the family. Learning how to live without things was a battle all by itself. Hearing the stories made me grateful to be born in a different era. However, each era has it's own battles to fight that will change the direction of the economy and maybe the world.Many people feel that we are in a depression. Unemployment rising, business closing its doors, and poverty in the United States on a rise, would make you think that we are in a depression. However, after careful research from articles, books, videotape, and previously conducted surveys, on the main causes of the depression, we realize that the recession that we are in is far from the Great Depression. Our research also uncovered the impacts of the depression that played a role in reforming the economy. Also, our research will show us how Franklin D. Roosevelt solved the depression and got the economy rolling again. Finally, there were many lessons learned by banks, business owners, and the government. We hope that the details of the Great Depression will enlighten you with comparisons on our current recession.Main CausesThe main causes for the Great Depression were a combination of unequally distributed wealth, the stock market crash, and eventually the bank failures. The unequal distribution of wealth existed on many levels. Money was distributed unequally between the rich and the middle class, between industry and agriculture within the US, and between the US and Europe. This imbalance of wealth created an unstable economy. The excessive speculations kept the stock market artificially high, but eventually lead to large market crashes. These market crashes, combined with the unequal distribution of wealth, and bank failures, caused the American economy to collapse.The distribution of national income became increasingly skewed in the 1920's. The nations total realized income rose from $74.3 billion in 1923 to $89 billion in 1929. However, the prosperity was not divided evenly amongst all Americans. "According to a study done by the Brookings Institute in 1929, the top .1% of Americans had a combined income equal to the bottom 42%. That same top .1% of Americans in 1929 controlled 34% of all savings, while 80% of Americans had no savings at all. While the disposable income per capita rose 9% from 1920 to 1929, those with income within the top 1% enjoyed a staggering 75% increase in per capita disposable income."A major reason for this gap between the rich and the working-class people was the increased manufacturing output through this period. Thus, wages increased 25% as fast as productivity increased. As production costs fell quickly, wages rose slowly, and prices remained constant. "In fact, from...

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