I try to learn more in depth about topics that interest me. I was reading about the Great Depression, but it is so hard to understand for me what exactly cause it, as I read it, it feels like a mix of fancy words that don’t tell me much (likely due to my lack of knowledge and english not being my 1st language). So, could anyone explain me in simple words what exactly cause the Great Depression?
In: 292
The great depression really runs from 29-40.
And it was WORST from 34-40.
People tend to date it from 29, because they know about the great stock crash of 29, but REALLY, most households didnt get hit from the stock market crash.
However, after the stock market crash, you saw waves of bank runs, which caused loans to dissapear, which slowed down business. Those waves of contraction made people try and save and save, to have a buffer against bad times but when everyone is trying to save money, at the same time, then no-one is spending money, and the overall economy contracts.
Hoover exacerbated this problem, by raising taxes (to balance the budget) causing the feedback loop of
“I dont have enough money->
I will save money ->
everyone is trying to save money->
no-one is spending money->
the economy overall shrinks, and everyone has less money”
To get worse and worse. Really this only got better when the government starting running MASSIVE deficits, to pay for WWII. Then people had money, and were willing to spend it,and the economy grew.
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