Loan Money To People example essay topic

The Great Depression This report is about the economic hard time of the 1930's. The great depression is a time when the people of the United States and the government's spending was out of control. You " ll learn that the great depression didn't just happen over night but accumulated over a period of time. It's a common misconception that the stock market crash in October 1929 was called by the Great Depression. They are closely related but both are result of the modern economy. People were spending more money than they made.

Banks played a role in the Great Depression because banks were willing to loan money to people who could not pay the loan back. Then the US is coming out of the roaring twenties and people were living good, plus the US is coming out of the WWI and time were good. The whole country is focused on getting rich quick enjoying the new fad of life, invention and new ideas. The old way of doing things was being replaced by the city-oriented Jazz Age. An example of this influence is the wearing of short skirts by women, makeup, smoking and drinking. People also developed self-centered attitudes that helped during the roaring twenties but was being to effect the economy.

Modern industry had the ability to produce vast qu aunties of product, but this created a huge problem with because the demand of these good was beginning to decline and there was a surplus of goods that merchants had to sell without profits. There was a one economic problem and that is that income was not distributed evenly to everyone. The amount of money going to the wealthiest was getting larger as the decade proceeded. To factors caused this problem. First the company showed outstanding gain in productivity, but the workers got received a small percentage of the profit.

At the same time the there was a tax cut to the rich but for lower income had no change and worker production was increased by 32 percent but workers wages only grew by 8 percents. Company profits grew by 65 percent in the same period of time and the government let the rich keep more of the profits. The Revenue Act of 1926 cut the taxes of people who made a million or more by two thirds. As a result of the trend the top 0.1 percent of American family had a total income equal of that of the bottom 42 percent. This meant people were listen to advertiser and bought goods that the they did not have the money for.

In the 1920's the started a new innovation called credit also an attractive name for "consumer debt". This concept of buy now pay later just the delayed unforeseen truth that they still had to pay for the goods they purchased. People had so much debt that they could not by the product coming of the assembling lines. American farmers who one quarter of the American economy were already in a depression in the 1920's, which made it difficult for farmers to participate in the "shopping spree" that the other Americans were doing. This was because the farmers had expanded there output during WWI when demand for farmed goods was high and Europe was cut sharply. Then after the war the farmers found themselves competing with the international markets.

This then caused farmers to lower their prices and to sell the goods without profit. Another factor was international problems weekend the economy because the US was the world's chief creditor as European countries had a hard time paying back debt and reparations. Many American Bankers were not ready for this new role. Many of them lent heavily and a wisely to borrows in Europe. Germany was one of the biggest borrowers and had no way to pay these loans back. These huge debts made the international banking system unstable.

Also the US kept a high tax on import from other country, this inter made it difficult for countries to sell their good to the US which meant they were not making any money and that meant no money to pay off debt. ECONOMIC COLLAPSE (1929-1933) The stock market crash was the first dramatic phase of a prolong e comic collapse. Conditions continued to worsen the next three years. Unemployment in those three years soared from 3.2 percent to 2409 percent leaving more than 15 million Americans without jobs. Those who had jobs were faced with pay cuts. With pay cuts that meant that they had less money to spend on goods except for food.

Many banks had loaned money to people who now could now not pay the loan back and banks could lose money due to bad investments in the stock market. Since people could not pay back there loan houses were were being foreclosed Because of this the homelessness was on the rise. Families started to live in crates and then it developed into shantytowns, which were called Hoover Ville named after the president who didn't intervene. ROOSEVELT AND THE NEW DEAL In the election of 1932 the people were irate that Hoover had not tried facilitating the economic downturn, so the election was figured that Hoover was not going to be the present. So Franklin D. Roosevelt won the election and now was president. Within days of inauguration Roosevelt called congress into special session so that he could get emergency legislation passed to help the country The first piece of legislation was to declare a bank holiday so that the could go in and reform the banking.

Then there was the Agriculture Adjustment of 1933 Act, which the government pays the farmers to not grow surplus crops. Then the National Industrial Recovery Act which helped to regulate the completion the industries. The Tennessee Valley Authority was created to give power to everyone to improve living condition. END OF THE DEPRESSION The depression didn't end over night but with the new acts in place the economy began to adjust and the country started to reform itself. Then WWII started and the US started to build warship and expanding the military. Cause of this decision the unemployment rate declined rapidly.

When the war started in 1941 the whole economy came together to support the war. Then a shortage of worker was the problem instead not enough jobs.