How Did The Stock Market Crash Affect The Economy

There are few events in the United States’ history that have been more tragic than those that succeeded the Stock Market Crash of 1929. The Stock Market Crash was an unexpected drop in the value of stocks that caused investors to lose all of their money. Everyone in the United States, and even the world, felt the consequences of the crash. The severeness of the situation was not aided by the government for many years, therefore adding and prolonging the devastation. Along with the fall of the stock market was the fall of the U.S. economy. The U.S. felt the repercussions of the crash for decades. The Stock Market Crash impacted the social, economic, and political aspects of the United States. In the 1920s, after World War I, everyone invested in the stock market because the market only seemed to be …show more content…
People did not have the money on hand to invest in stocks, so they took out their savings and bought on margin, which means getting a loan to buy stocks (Investopedia). This time period, known as the Roaring Twenties, saw the United States’ wealth double due to the proliferation of investors (History Staff). However, the general population had no idea how the market really worked. The people of Wall Street took advantage of their ignorance and controlled the market in their favor in order to gain more profit by using illegal practices, like insider trading (Investopedia). The market soon became overbought and overvalued. Unexpectedly, on October 24, 1929 (Black Thursday), the stock market dropped (Investopedia). Lenders called in their loans, which the borrowers had to somehow pay (Amadeo). Unfortunately, to pay off their debt some had to sell their houses and liquidate their savings. Though, the