Analyze The Causes And Consequences Of The Great Depression

In the 1920s, most of the citizens in the United States were having the best time of their lives. It was even dubbed the Roaring Twenties because of its successfulness. Many would not hesitate to spend their money on buying the latest item or stock credits. In the midst of this, Republicans were also elected to become the President for the next few terms since they were praised for bringing the economy up. Consequently, Herbert Hoover became the President after Calvin Coolidge. Everything was going splendid until one day on October 29, 1929, the stock market crashed. This marked the beginning of the Great Depression. Before the stock market crash, the residents living in the cities were better off than those living in rural areas. Those residents got to experience freedom where they had free time to do as they wished and left over money to buy products that called upon them (i.e. Model T). Though the
This led to an uneven distribution of wealth consisting the top 1% of the wealthiest. The top 1% earnings were equivalent to the bottom 42% of the American population. The rich may have had double the amount of money as an average person, but they were not buying enough to keep the economy going. The second cause of the Great Depression would be easy credit. To pay for the items that could not be afforded, the consumers would use installment plans where a small percentage would be paid while the rest will be paid over the course of years. As a result, more and more debt is accumulated. More than half of the products bought were obtained by credit. Easy credit allowed the people to freely spend their money and not worry about not being able to pay back. The next cause is stock speculation. Much of the money was being invested. Investors would gamble