Main Causes Of The Great Depression And How FDR's New Deal Helped The US Out Of It

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Optional Paper Franklin Delano Roosevelt and his "New Deal"� The Great Depression was the worst point in US history, which spread over virtually the entire industrialized world. The Depression started in 1929 and lasted about a decade. Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the differences in wealth throughout the 1920's, and the extensive stock market speculation that took place later that same decade. The unequal distribution of wealth in the 1920's existed on many levels. "Money was distributed disparately between the rich and the middle-class, between industry and agriculture within the United States, and between the U.S. and Europe (Gusmorino 2)."� This imbalance of wealth created an unstable economy. Many people lost their jobs, their money, even their homes. The government had no way of knowing that this would happen. The government has many safeguards against a crash happening again, now that the stock market is strong again.

The Great Depression began for many reasons. The "excessive speculation in the late 1920's made everyone believe that the stock market was doing well (Gusmorino 1),"� but eventually lead to large market crashes. It is often said that the Stock Market crash in October of 1929 was the cause of the Great Depression, "but did it actually cause it? The answer is no. First, the stock price for an individual company reflects current information about the future income of that particular company (Nordeen 1)."� Thus, it is a change in available information that changes the stock price. When the government began to raise interest rates in early 1929, this information began the tumble. However, a stock market crash could cause people to increase what they think their trade-in should be causing them to hoard their money...