The United States have gone through some historical economic ups and downs, two of the most known and horrific slump being the Great Depression of the 1930’s and the Great Recession. Both, the Great Depression and the Great Recession, are characterized by bank failures, unemployment, economic decline, stock market crashes, price changes, and the Feds. They are both fallouts of the same economic phenomenon and are only different in a few minor respects. There were many reasons that caused the downturns. Before I began my research, I thought that the stock market crash caused the Depression, and nothing else. But the stock market crash was just part of the problem, and more the culmination of many different factors. We can consider the crash as acting like a firework explosion after the fuse is lit. In October 1929, the world became transfixed by the bright display of the plummeting stocks. The economic situation got much worse after the crash. I found out that the Great Depression and the Recession shared similarities in that they both occurred because of a combination of bank failures and stock market crashes, as well as rampant debt (Ferguson 36). People believed that they could buy whatever they wanted, even if they had no way to pay for it. They just had to get a loan from a bank. The banks gave loans to anyone, even people who had bad credit and no knowledge on how to manage money. The people who got the loan did not consider how they would pay back the bank, and so these people spiraled down ever deeper into debt.
When comparing the Recession to the Great depression there are many similarities and differences. The credit boom in the 1920s was more national as opposed to the 2004-2007 boom which was global. Liquidity and funding problems played a key role in the financial sector in both events. Concerns about the net worth and financial intermediaries were at the root of both crises. During the Great Depression, bank deposits were lost as banks failed....
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