The Great Depression

There was not only one leading factor to what caused the Great Depression. It was a combination of domestic and worldwide conditions that led to the Great Depression. One of the major contributions to the Great Depression was the Stock Market Crash of 1929. After the crash stockholders lost over $40 billion dollars. This was a great loss for America and started the great depression. After the stock market crash the Banks soon started to fail. This was another cause of the great depression. In 1930 over 9,000 banks failed. Which lead to people losing all their savings.  Soon people refused to purchase all items being sold which lead to business being put out of business. When the businesses started failing, the government created the Smoot-Hawley Tariff. This was something they would protect American companies.

The first major Government Intervention was to reduce trade with other foreign countries. They would reduce importing goods to save Americans Jobs. This seemed to rescue the economy for a short while.

Lots of people believe that The Great Depression was caused by failure of a free market and was resolved by government intervention. I believe that this is not true. After the Tariff was created a couple months later, more people were losing their jobs more than ever and that sky rocketed to the double digits And I believe that, that truly cause depression throughout the United States.

I know this to be true because the stock market crashed again in 1987. Most people forget about this crash because of how America responded to this second stack market crash was mush more affective then how America did in the 1930’s. During the 1987 stock market crash President Ronald Reagan did nothing and the economy continued growing.  Reagan did not intervene in the economy after the stack market crash in 1987.

I am for the free market system. It may have its flaws, but with it you can view both the productivity growth more quickly when the country produced services. The free market system also allows export jobs to pay more often then other jobs. And with the free market system people feel that they have more freedom to choose what they want to do and with that I think people make better decision and respect the law more.