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Great Depression

The Great Depression

During the 1920’s America was experiencing great economic growth. As WWI was ending Americans were out of energy. For almost 100 years they had been facing the problems of sectionalism, civil war, reconstruction, imperialism, and WWI. By the end they were ready to just sit back and party. Demand sky-rocketed and brought great economic growth. Americans failed to see the great problem looming overhead though. The Great Depression was caused by a combination of factors- a natural slowdown of the business cycle, weaknesses of the 1290’s economy magnified the slowdown, the republican response failed to help, a great environmental disaster, and the collapse of the world economy all contributed to the cause of the Great Depression.
In 1929 the American economy began to slow down. It is a natural part of the business cycle in which all industrial nations experience. There are times when demand is high and the economy grows, but then once people have the things they want demand goes back down and the economy slows down. Usually the economy goes up again after a few years, but in 1929 the slowdown exposed many weaknesses of the 1920’s economy.
The 1920’s economy had a good number of problems which magnified the slowdown of the economy in 1929. First was that there was very little economic diversity as a few large businesses dominated in the economy and when they started going down they dragged everyone along with them. Second was that there was a large stratification of wealth in which 1% of the population owned about 59% of the wealth. Businesses did not increase wages during their great prosperity in the 1920’s so when the economy began slowing down millions of average workers did have a sufficient amount of money to withstand it. Third was that the farm economy was already in crisis. When WWI ended demand for farmed goods decreased, but farmers were still producing just as much and this placed them in an overproduction/debt cycle. As prices...