Similarities Between The Recession And The Great Depression

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The Great Depression comparisons to the Great Recession

This paper discusses parallels between our current recession and the Great Depression. The Great Depression was an economic slump in North America, Europe, and other industrialized areas of the world that began in 1929 and lasted until about 1939. It was the most severe depression of not only the 19th century but in american history. According to Illinois University, By 1933, 11,000 of the United States ' 25,000 banks had failed.U.S. manufacturing output had fallen to 54 percent of its 1929 level, and unemployment had risen to between 12 and 15 million workers, or 25-30 percent of the work force. Although originating in the United States it quickly spread to the
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Factors such as debt liquidation and distress selling, a reduction in output in trade and in employment, hoarding of money. The Foundation of economic education states in regards to the great depression “The Federal Reserve, after keeping interest rates artificially low in the 1920s, raised interest rates in 1929 to halt the resulting boom. That helped choke off investment.” With FDR stating “I pledge you, I pledge myself, to a new deal for the American people. Let us all here assembled constitute ourselves prophets of a new order of competence and of courage” he ushered in civil jobs to help bring the economy back. Jobs such as construction projects, conservation projects and irrigation reform. However it would not be until World War 2 and the need for fighting men that the great depression …show more content…
In the case of the Great Depression, the Federal Reserve, after keeping interest rates artificially low in the 1920s, raised interest rates in 1929 to halt the resulting boom. President Hoover signed into law the Smoot-Hawley Tariff, which stifled trade and damaged American exports throughout the 1930s. Finally, the President signed a large tax increase into law in 1932, which halted entrepreneurship.

The government in the 1990s began pushing homeownership, even for uncreditworthy people. Mortgage-backed securities built on dubious mortgage loans became “toxic” when the housing market took a downturn, and many American banks verged on collapse. The government’s urgent desire to bail out various banks and corporations created uncertainty and instability, and this may have widened the

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