The Great Depression

4 Pages 976 Words

The Great Depression in the 1930’s was the worst economic disasters to hit the United States and spread to virtually the entire industrialized world, making it very unique in its magnitude and consequences. The depression began in October of 1929, and lasted for about a decade. At the height of the depression, more workers were out of work than ever before. In fact, the average jobless rate was about 25 percent with some regions suffering from extreme unemployment, while the unemployment rate for the rest of the world was equivalent to or greater than that of the United States.
What caused this great economic turn around from the prosperity of the 1920’s? There are many factors that played a role in causing the depression; however, the main causes of the depression were the unequal distribution of wealth, the extensive stock market speculation during the 1920’s, and the failure of the agricultural market. The misdistribution of wealth existed on many levels. Wealth was distributed unequally between the rich and middle-class, and between the United States and the European nations. This imbalance of wealth caused the economy to become unstable. The extreme speculation of the Stock Market kept stocks at artificially high values, eventually leading to the major crash of October 1929. Agricultural markets were failing because of the end of a wartime economy and advances in the production of goods caused huge surpluses that farmers were unable to sell for profit. The imbalance of wealth, unreasonable speculation in the Stock Market, and the failing agricultural markets caused the economy of the United States and the European nations to fail, causing The Great Depression.
With a huge and growing disparity of wealth between the rich and middle-income citizens, the economy became very unstable. For an economy to work properly the total demand must equal the total supply. When an economy has a large disparity in the dis...