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Chris Hardy & Alex Khomyakov
Stewart History 8th CP
February 8, 2009
The Great Depression and Today
The economic downturn and the subsequent recession had many on Main Street wondering what happened. America was glued to the news as we watched our stock's become worthless and our government panic; we then looked out our windows and realized it was all too real. We saw our neighbor's homes foreclosed on, and the pain that caused. The recession brought an end to the era of overspending that we all were accustomed to. However, if history is any indication, this period of fiscal responsibility is not to last. The emotions stirred up were all too familiar and brought forth a feeling of dÃÂ©jÃ vu. Young men and women asked how we could have let this happen, and elders asked how we could have let this happen again.
The great depression and great recession are similar in many ways including social aspects, financial climate, and the government's reaction to the disaster.
As with any disaster directly caused by humans, the social climate of the period leading up to and during the disaster is an important aspect. In late 2007 it was evident that consumer faith in the economy was down. This loss of faith was attributed to the massive increase in CPI in the previous year, making unnecessary spending harder for the American family. Decreased spending in the market place translated into decreased demand which put pressure on firms who depended on consumer spending and even caused many firms to fail. This cascading effect continued until there was a complete crash on Wall Street. This CPI increase was a result of the friendly climate for the American investor during 2005 and 2006 during which there was a 10%...