What is great depression in the US?
The Great Depression, which lasted from 1929 to 1939, was the worst economic downturn in the history of the industrialized world. It all started after the October 1929 stock market crash, which plunged Wall Street into a frenzy and wiped out millions of investors. Consumer spending and investment fell sharply during the next few years, resulting in significant drops in industrial output and employment as failing businesses laid-off workers. By 1933, when the Great Depression had reached its worst, 15 million Americans had lost their jobs, and nearly half of the country’s banks had failed.
What caused it?
The stock market, based on the New York Stock Exchange on Wall Street in New York City, was a hotbed of irrational speculation, with everyone from billionaires to cooks and janitors investing their savings. As a result, the stock market saw fast growth, peaking in August 1929.
By that time, manufacturing had slowed and unemployment had soared, resulting in stock values that were far higher than their true value. Furthermore, wages were low at the time, consumer debt was rampant, the agriculture sector of the economy was suffering from drought and declining food prices, and banks had an excess of large loans that couldn’t be repaid.
On “Black Thursday” the stock market crashed which is 29th of October as people began to sell their stocks in a frenzy making the stocks lose their value.
What happened due to stock market crash?
As consumer confidence plummeted in the aftermath of the stock market crash, manufacturers and other businesses were forced to reduce production and lay off people. Wages and purchasing power declined for those who were fortunate enough to keep their jobs.
Many Americans who were compelled to buy on credit became indebted, and the number of foreclosures and repossessions progressively increased. The global adherence to the gold standard, which brought countries all over the world together in fixed currency exchange, aided in the spread of the United States’ economic difficulties around the world, particularly in Europe.
People were starving and the banks had crashed.
How did it end?
The New Deal and World War II together pulled the United States out of the Great Depression.
The depression was finally healed by mobilizing the economy for World War. Millions of men and women enlisted in the military, and countless more went to work in well-paying defence positions. World War II had a tremendous impact on the world and the United States.
Between 1933 and 1939, President Franklin D. Roosevelt implemented a series of programs, public works projects, financial reforms, and laws known as the New Deal. Which reformed Wall Street.
World War II still has an impact on the US and the rest of the world even now