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FirmhandKY -> RE: Financial Reality (7/26/2011 6:47:28 AM)
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quote:
ORIGINAL: DomYngBlk
History tends to repeat itself. cutting taxes, balancing budgets, taking people from this country and shoving them into another one....all helped in creating the Great Depression. Rhetoric from the right is trying to accomplish this feat once again. Roosevelts attacks on Hoover in 32 were no better which proved themselves out later in his term. We can all either learn from history and change or damn ourselves to repeat it over and over.
I don't follow your logic.
Here's one short list of the causes of the Great Depression:
Top 5 Causes of the Great Depression
1. Stock Market Crash of 1929
Many believe erroneously that the stock market crash that occurred on , October 29, 1929 is one and the same with the Great Depression. In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars. Even though the stock market began to regain some of its losses, by the end of 1930, it just was not enough and America truly entered what is called the Great Depression.
2. Bank Failures
Throughout the 1930s over 9,000 banks failed. Bank deposits were uninsured and thus as banks failed people simply lost their savings. Surviving banks, unsure of the economic situation and concerned for their own survival, stopped being as willing to create new loans. This exacerbated the situation leading to less and less expenditures.
3. Reduction in Purchasing Across the Board
With the stock market crash and the fears of further economic woes, individuals from all classes stopped purchasing items. This then led to a reduction in the number of items produced and thus a reduction in the workforce. As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and their items were repossessed. More and more inventory began to accumulate. The unemployment rate rose above 25% which meant, of course, even less spending to help alleviate the economic situation.
4. American Economic Policy with Europe
As businesses began failing, the government created the Smoot-Hawley Tariff in 1930 to help protect American companies. This charged a high tax for imports thereby leading to less trade between America and foreign countries along with some economic retaliation.
5. Drought Conditions
While not a direct cause of the Great Depression, the drought that occurred in the Mississippi Valley in 1930 was of such proportions that many could not even pay their taxes or other debts and had to sell their farms for no profit to themselves. The area was nicknamed "The Dust Bowl." This was the topic of John Steinbeck's The Grapes of Wrath.
I'm not sure what you said plays into any of these in any great amounts.
Firm
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