The Great Depression was a tragic time in United States history that would forever change the way the government handles social, economic, and political problems within the country. During the 1920s, between the explosion of new products, culture, and entertainment, it seemed like good days were there to stay. Although this was true, many people were caught with blind optimism, and because of events such as the failures of banks which made many lose all of their money, and excessive usage of credit, which filled Americas economy with lies, the Great Depression started directly hacking at America, its people, and its economy.
There were many minor causes of the Great Depression, but one that has had the one of the greatest impacts the US was the failure of banks. Credit spending was arguably the big cause of the failing banks. All throughout the 20s and into the 30s, people now had the ability to borrow money from banks to buy a product or asset with a small down payment. Why this was bad at the time was because people kept buying many things on credit and would never pay the bank back, hence making the banks shut down for lack of cash flow. It is clear that once the panic in 1929 occurred, the Great Depression started going in full swing. In the United States Business Cycle, there was a climax deviation of -60% around 1933, but that deviation started in late 1929, right after the time of the crisis.(Doc A) Banks also had to have the strength to support the stock market after crash in 1929. Stock prices slump $14,000,000,000 bankers to support market today.(Doc D) Not only does the article show all feelings of negativity, but the bankers are now becoming the backbone of the stock market. The worst part about all of these banks closing is that everybody was losing all of the money in their account with no possible way of getting it back. At the time there was no FDIC that insured a certain amount of money in an account; once your bank closed, your money was gone.
