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US History

The great depression

7 Causes and Effects of the Great Depression for Kids

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7 Causes and Effects of the Great Depression for Kids

Kyara Patterson

@kyarapatterson_htev

57 Followers

The Great Depression was a severe economic downturn that began with the 1929 stock market crash and lasted through the 1930s. It had devastating effects on the U.S. economy and society, with widespread unemployment, poverty, and bank failures. President Franklin D. Roosevelt responded with the New Deal, a series of programs aimed at providing relief, recovery and reform.

Key points:

The stock market crash of 1929 triggered but did not solely cause the Great Depression
Multiple causes of the Great Depression included uneven wealth distribution, overproduction, debt, banking failures, and government policy mistakes
Unemployment reached 25% at the Depression's peak
FDR's New Deal programs aimed to provide relief, stimulate recovery, and reform the financial system
Public works programs like the WPA were created to provide jobs and improve infrastructure

2/17/2023

105

Great Depression & New Deal
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The Causes and Effects of the Great Depression

The Great Depression was a severe economic downturn that began with the 1929 stock market crash and had far-reaching impacts on American society. This page provides an overview of the key causes and effects.

Highlight: The stock market crash of 1929 was the event that started the Great Depression, but it was not the sole cause.

The Depression resulted from several underlying weaknesses in the economy, including:

Uneven wealth distribution, with 40% of families in poverty
Excessive consumer debt
Overspeculation in the stock market
Overproduction in industry leading to layoffs
A farming crisis
Government policy mistakes

Definition: Overspeculation refers to excessive risk-taking in financial markets, often using borrowed money.

These factors combined to create a downward economic spiral that was difficult to reverse. Understanding these multiple causes provides important context for the severity and duration of the Great Depression.

View

Primary Causes of the Great Depression

This page examines the key factors that contributed to the economic collapse of the Great Depression in more detail:

Insufficient consumer demand: With 40% of families in poverty and extreme wealth concentration at the top, there were not enough buyers for goods being produced.
Excessive debt: 80% of families had no savings, and many were buying on credit beyond their means.
Stock market speculation: A "get rich quick" mentality led many to make risky stock investments using borrowed money.
Industrial overproduction: Factories were producing more than could be sold, leading to layoffs and price cuts in a vicious cycle.
Agricultural crisis: Farmers faced droughts and low crop prices, defaulting on loans.
Government policy errors: Low pre-crash interest rates, lack of financial regulation, and no bank deposit insurance worsened the situation.

Example: People buying stocks "on margin" with borrowed money lost everything when prices collapsed, also causing bank failures as loans went unpaid.

Understanding these interconnected causes helps explain why the Depression was so severe and long-lasting compared to other economic downturns.

View

The Effects of the Great Depression

This section explores the wide-ranging impacts of the Great Depression on American society:

The economic collapse had devastating effects, including:

Unemployment reaching 25% of the workforce
Widespread homelessness and hunger
Psychological depression among the population
Bank failures and loss of savings

Highlight: The unemployment rate peaked at 25% in 1933, compared to around 3.5% before the crash.

Visual evidence of the human toll is shown through images of breadlines in New York City in 1931, illustrating the desperation many faced.

While the impacts were overwhelmingly negative, one positive outcome was increased cooperation among communities to help those in need.

Graphs demonstrate the sharp decline in Gross National Product (GNP) and the spike in unemployment between 1929-1933, providing stark visual evidence of the Depression's severity.

View

Initial Government Response Under President Hoover

This page examines the early government reaction to the Great Depression under President Herbert Hoover:

Initially, Hoover favored a traditional limited government approach:

Believed private charities should be responsible for helping the poor
Felt the federal government should not directly support individuals

Quote: "I do not believe that the power and duty of the general government ought to be extended to the relief of individual suffering...though people support the government, the government should not support the people." - Herbert Hoover, 1930

However, as the crisis deepened, Hoover reluctantly shifted his stance:

Initiated some large infrastructure projects like the Hoover Dam
Raised tariffs (which backfired by reducing international trade)
Supported programs to help banks extend loans to struggling businesses

These limited measures proved inadequate to address the scale of the economic collapse, leading to Hoover's defeat in the 1932 election.

View

The Election of 1932 and FDR's New Deal

This section covers the pivotal 1932 election and the launch of FDR's New Deal programs:

By 1932, the American people demanded new leadership to address the crisis. Democrat Franklin Delano Roosevelt (FDR) easily defeated incumbent Herbert Hoover, promising a "New Deal" for the American people.

Quote: "The only thing we have to fear is fear itself" - FDR's famous line from his inaugural address

The New Deal was FDR's comprehensive plan to combat the Great Depression through government action. It was based on three main goals:

Relief: Immediate aid for the unemployed and poor
Recovery: Temporary programs to restart the flow of consumer demand
Reform: Permanent programs to avoid another depression and ensure greater long-term economic stability

Example: The Federal Emergency Relief Administration (FERA) provided funds for local relief efforts, while public works programs like the Works Progress Administration (WPA) created jobs and improved infrastructure.

These programs marked a major shift in the role of the federal government in managing the economy and providing a social safety net.

View

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Subjects

US History

The great depression

7 Causes and Effects of the Great Depression for Kids

Kyara Patterson

@kyarapatterson_htev

57 Followers

Key points:

The stock market crash of 1929 triggered but did not solely cause the Great Depression
Multiple causes of the Great Depression included uneven wealth distribution, overproduction, debt, banking failures, and government policy mistakes
Unemployment reached 25% at the Depression's peak
FDR's New Deal programs aimed to provide relief, stimulate recovery, and reform the financial system
Public works programs like the WPA were created to provide jobs and improve infrastructure

2/17/2023

105

US History

The Causes and Effects of the Great Depression

Highlight: The stock market crash of 1929 was the event that started the Great Depression, but it was not the sole cause.

The Depression resulted from several underlying weaknesses in the economy, including:

Uneven wealth distribution, with 40% of families in poverty
Excessive consumer debt
Overspeculation in the stock market
Overproduction in industry leading to layoffs
A farming crisis
Government policy mistakes

Definition: Overspeculation refers to excessive risk-taking in financial markets, often using borrowed money.

Primary Causes of the Great Depression

This page examines the key factors that contributed to the economic collapse of the Great Depression in more detail:

Insufficient consumer demand: With 40% of families in poverty and extreme wealth concentration at the top, there were not enough buyers for goods being produced.
Excessive debt: 80% of families had no savings, and many were buying on credit beyond their means.
Stock market speculation: A "get rich quick" mentality led many to make risky stock investments using borrowed money.
Industrial overproduction: Factories were producing more than could be sold, leading to layoffs and price cuts in a vicious cycle.
Agricultural crisis: Farmers faced droughts and low crop prices, defaulting on loans.
Government policy errors: Low pre-crash interest rates, lack of financial regulation, and no bank deposit insurance worsened the situation.

Example: People buying stocks "on margin" with borrowed money lost everything when prices collapsed, also causing bank failures as loans went unpaid.

Understanding these interconnected causes helps explain why the Depression was so severe and long-lasting compared to other economic downturns.

The Effects of the Great Depression

This section explores the wide-ranging impacts of the Great Depression on American society:

The economic collapse had devastating effects, including:

Unemployment reaching 25% of the workforce
Widespread homelessness and hunger
Psychological depression among the population
Bank failures and loss of savings

Highlight: The unemployment rate peaked at 25% in 1933, compared to around 3.5% before the crash.

Visual evidence of the human toll is shown through images of breadlines in New York City in 1931, illustrating the desperation many faced.

While the impacts were overwhelmingly negative, one positive outcome was increased cooperation among communities to help those in need.

Graphs demonstrate the sharp decline in Gross National Product (GNP) and the spike in unemployment between 1929-1933, providing stark visual evidence of the Depression's severity.

Initial Government Response Under President Hoover

This page examines the early government reaction to the Great Depression under President Herbert Hoover:

Initially, Hoover favored a traditional limited government approach:

Believed private charities should be responsible for helping the poor
Felt the federal government should not directly support individuals

Quote: "I do not believe that the power and duty of the general government ought to be extended to the relief of individual suffering...though people support the government, the government should not support the people." - Herbert Hoover, 1930

However, as the crisis deepened, Hoover reluctantly shifted his stance:

Initiated some large infrastructure projects like the Hoover Dam
Raised tariffs (which backfired by reducing international trade)
Supported programs to help banks extend loans to struggling businesses

These limited measures proved inadequate to address the scale of the economic collapse, leading to Hoover's defeat in the 1932 election.

The Election of 1932 and FDR's New Deal

This section covers the pivotal 1932 election and the launch of FDR's New Deal programs:

Quote: "The only thing we have to fear is fear itself" - FDR's famous line from his inaugural address

The New Deal was FDR's comprehensive plan to combat the Great Depression through government action. It was based on three main goals:

Relief: Immediate aid for the unemployed and poor
Recovery: Temporary programs to restart the flow of consumer demand
Reform: Permanent programs to avoid another depression and ensure greater long-term economic stability

Example: The Federal Emergency Relief Administration (FERA) provided funds for local relief efforts, while public works programs like the Works Progress Administration (WPA) created jobs and improved infrastructure.

These programs marked a major shift in the role of the federal government in managing the economy and providing a social safety net.