Great Depression

11 Pages 2765 Words

families with
incomes around, or usually less than, $2,500 a year. The bottom three quarters of the population had a collective income of
less than 45% of the combined national income; the top 25% of the population took in more than 55% of the national
income. Through this period, the U.S. relied upon two things in order for the economy to remain even: luxury spending,
investment and credit sales. One solution to the problem of the vast majority of the population not having enough money to
satisfy all their needs was to let those who wanted goods buy products on credit. The concept of buying now and paying
later caught on quickly. By the end of the 1920’s, 60% of cars and 80% of radios were bought on installment credit.
Between 1925 and 1929 the total amount of outstanding installment credit more than doubled from $1.38 billion to around
$3 billion. Installment credit allowed one to "telescope the future into the present", as the President's Committee on Social
Trends noted. This strategy created artificial demand for products which ...