Economic Downfalls
Black Tuesday, October 29, 1929 was the beginning of the most difficult years in America's history. That day the stock market crashed, sending the U.S. into the Great Depression that would last for over a decade. The Great Depression put millions of Americans out of work , and was the beginning of the government being involved in the economy.
Panic struck as the stock market was continuously dropping and dropping until it finally crashed. Millions of people were furiously trying to sell their stock, but no one was buying: what seemed to have been a get-rich-quick scheme had become the path to bankruptcy. Banks who had invested large portions of their clients savings into the stock market closed, which only created more panic and caused people to hurry to their banks and withdraw all their money. Quick cash withdraws eventually produced even more banks to close, and those who did not make it to the bank to withdraw their life savings before they closed were left with nothing. |
The capital belonging to businesses that was invested in the stock market or in banks were all lost. Many businesses were forced to close, some were able to squeeze through by cutting back their worker's wages or hours, or even lay some workers off. More businesses had to close, because consumers were not spending their money on luxury goods and with no consumers there is no need to make a product.
Not only were businesses hurting, but the people who had once had a steady job were now without.
Not only were businesses hurting, but the people who had once had a steady job were now without.
The most recent recession America has seen was in 2008. This recession was not nearly as devastating as the Great Depression, but it changed the perspectives of millions of Americans and let an insight on how much worse it was during the Great Depression. The Recession of 2008 is considered the worst financial crisis since the Great Depression. It resulted in thousands of businesses having to close, leaving their workers jobless, and caused consumers to rethink what they were buying: very similar to the affects of the Great Depression. Instead of the stock market crashing, the main reason for the Recession of 2008 was the continuing decline of the value of the American dollar. The high oil prices and the quick selling of properties that still had unpaid mortgages to them. The Recession of 2008 never got to the extreme of the Great Depression, but certainly had many qualities that were the same and had similar affects that effected businesses and individuals. |