Great Depression Compare And Contrast Essay

Almost seventy years after the worst economic crisis struck the world in the 1930s, history repeats itself again. The Great Depression that occurred in 1929 and today’s great recession have many similarities. Both had disastrous effects on the global economy. Like today, many years of economic deregulation paved the way for these turmoils and social troubles. Banks were giving away cheap credits without running any background information on their customers. People took advantage of this and started buying houses and other luxuries they couldn’t afford. Default in paying back their mortgage led to many problems such as real-estate crisis, rising inflation, soaring unemployment rates, and stock market crash.

The 1920s, also known as “The Roaring Twenties”, had been an unexampled success in America’s stock market. Investors tried to benefit from this upturn. They started digging in their own savings and buying stocks on margins. Stock brokers were charging high rates for investors who desired to purchase stocks on margins but this did not matter for them because the market was rising sharply in a fast pace. From the beginning to the end of this decade, stocks more than quadrupled in value. Stock prices started to unexpectedly
Real-estate market was exceptionally prosperous. The number of Americans owning their own homes reached an unprecedented record of forty nine percent. A similar phenomenon occurred between the years of 2006 and 2008. Everyone was taking advantage of the easy access to mortgages. Analysts show that during this period, about sixty eight percent of Americans owned their homes. This real-estate boom all ended when a wave of foreclosure hit the financial sector globally. This situation was worsened by the steep decline in house prices which left home owners unable to pay or refinance their