The Great Depression

I could not agree anymore with Albert Einstein’s quote which was, “What goes up, must come down,” it is true. He was extremely accurate with this saying. I am, of course, referring to the Great Depression. From 1929 to 1940, the United States suffered from the greatest economic depression in history. An economic depression is a downturn in the country's economic flow.The unemployment rate in 1932 was 12,060,000 people. The suicide rate from 1930-1940 was at 154,000 people. The Great Depression lasted ten years; a full decade. So, what exactly caused the Great Depression? Well, there were many causes resulting in the Great Depression, but three significant and predominant causes such as, speculation/installment buying, uneven distribution of wealth, and overproduction.
I believe that speculation and installment buying is truly what caused the Great Depression. People were ignorant and did not think about the future. This all set up a constant cycle of failure up for the economy. Speculation is when the stock brokers predicted that the stocks prices in future. If the speculation is positive, it is bought. If the speculation is negative, it is not bought or sold. Investors put their own money into stock securities, money they lost when the market crashed. (Doc 5) Installment buying was when people made large purchases they could not afford and were credited money to pay back over a period of time. The period of time before the Depression the stock market was very impressive. People were spending so much money not realizing it was not going to be paid back. (Doc 6) There was a huge uneven distribution of wealth in the country as well. Families were split in half. There were both poor people and rich people. The rich people were very rich and the poor people were very poor; there was no in between. The economy was not circulating that way. Some families were living on incomes as low as forty-six cents a day. (Doc 7) Major companies were affected because they could not sell their products. (Doc 8) The rich people needed the poor people working and making money in order for their lives to function normally and for them to continue to be rich. The depression was tearing families apart. A family could not live on a annual income of under $1000 yet 21% of the country was. Only a small amount of 2% of the country had an annual income of $10,000 or more. (Doc 9) The country was so poor that 60% of it was poverty stricken. Overproduction was a result of the first cause of the depression. Overproduction was when the country produced more than people were buying. At this point, people were getting hit with their bills that they could not afford to pay so they certainly were not able to buy more. (Doc 10) A lot of speculation was made during this period of time. No one ever paid the money they owed back which made many companies go under - or bankrupt. Farmers had to stop growing certain crops because they could not afford to grow something that would not sell as well. (Doc 11) The farming industry sank, as well as every other industry in America. There were three main reasons for the Great Depression caused by three main causes including speculation/installment buying, uneven distribution of wealth, and overproduction. The Great Depression was caused simply by a series of unfortunate events. The economy was at one point up, very high up, but just like Albert Einstein’s theory, what goes up must come back down. This is exactly what happened to the economy during the 1900’s; it had crashed harder than it had risen. There was no possibility that the economy would not sink, that period of time people were very irresponsible with their money decisions and cost the country a lot of pain over many years. What goes around comes back around and the poor people had no jobs and money and eventually that was turning on the rich people as well.