Causes of the Great Depression Across USA

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It is the worst economic fall. It occurs when state bank and government gets fail to control is the next step of recession, which is more vulnerable for the economy, and nation. When the country is going through depression the whole shares market crashes, Jobless rate gets very high and almost every organization gets bankrupt.

Lets take a look on causes of the Great Depression .The first cause is when government and state bank fails to control recession the economy starts getting into depression. Another cause is natural disaster or a sudden war. Natural disaster is most often to put any economy in it because it tends to collapse everything.

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Purchasing was decreased Across USA, shares market got crashed and there were several fears of more economic fails, people from all classes stopped purchasing goods. This causes reduction in the number of items produced and due to this factories start to shut and jobless started to increase with a rapid speed. As people started lose their jobs, they were unable to pay for items they had purchased on installments and their items were repossessed from them. The jobless rate was more than 25% which means, the buying power of people start to decrease with a full scale. As almost every business start failing, the government created a tariff in 1930 to help and protect American companies. Government imposed high taxes for imports, which means less trade between America and other foreign countries.

The it directly hit shares market, which is the backbone of any economy. While a country is going through depression its shares market crash down and it’s almost deadThe second impact of it is on people. Everyone start losing their jobs when people gets jobless their buying power reduces due to lack of money and they are unable to fulfill even their basic needs.

People gets jobless because organization, businesses get bankrupt, they get bankrupt due to lack of investments, and in fact, in depression phase there are no investments at all.The it was the time of great economic crises in began in the United States but started to expand throughout the this period almost everyone lost their jobs and became homeless.

In 1930, JOHN MAYNARD tried to understand the incident of it. Keynes suggested that increasing government expenditure and lower taxes could surely help to boost demand and take economy out of depression.For this purpose, Keynes wrote a book named as “general theory of employment, interest and money”.

The General Theory of, Interest, money and employment is the most important book by a great economist Keynes. It created a great change in economic thought and mindsets of many economists; macroeconomics took its central place after this book. It analyze the drawbacks in economic policies, it acts as theoretical support for government spending in general.

The incident of it took place in the year 1929 when the shares market of USA crashed and failed miserable. All Economists gave so many reasons behind it like over production, bank failures and consumer debts etc.

The great depresion ended when World War II took place. The wartime economy provide so many jobs means jobless rate controlled, organizations, and factories started to work with full capacity. Things started to be controlled rapidly after World War II.

The occurs when government and state bank gets fail to control recession so it’s very necessary to cure recession in very time because recession is short run and economy can get out of it with few strong efforts but depression is long run and its impact on economy is very long government and state bank needs to get in action in recession phase otherwise the country can step in to depression which is more vulnerable for whole economy and nation.    

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