How Successful Was The Economy In The 1920's

Nearly 12 million Americans were unemployed in 1932. Families lived in shacks and ate leftover food from hospitals. Communities couldn't afford to keep schools open, so a third of a million children couldn’t go to school. Years of poverty left Americans asking what the cause of the economic crisis was.

The economies of the Allied Powers were damaged by World War I. Great Britain, France, and the Soviet Union were all in debt and the costs of the war ran resources low. Major cities of Europe were destroyed. Asia and South Africa more industrialized. Demand for goods and services lowered. Germany had to help pay for the cost of war. The United States benefited after WWI.The nation quickly directed its focus on consumer production. Industry expanded to produce luxury goods, not just necessary goods. If one factory laid off workers, those workers wouldn’t be able to buy goods made by other workers, who were then laid off. The economy became more international. However, the economy of the U.S. stayed nationalistic. The United States prospered and was able to lend money to other countries.
It became more interested in making its own profits than trying to regulating the world economy. The U.S. stock market was just as important as the world economy. Short-term investors borrowed money in the 1920s to pay for stocks on credit. If the stock price went up, they could repay the money. If the price went down, they didn’t make enough profit to repay the bank. If this happened, the bank would lose money. Stock prices wouldn’t go down as long as people continued to pay for goods and services.By 1929, becoming involved in the stock market made more profit than waiting and investing in a company's product and sharing in its future products. The demand for stocks went up. Since people became more and more interested in buying stocks, the price for stocks