Introduction
The great depression was the worst time for American people of all the time. There were many factors that the great depression at that time, but one of biggest caused was the stock market crash in 1929, because everyone forced to sold their stocks at once and there was no enough money to pay to those people, so the stock market crashed. Millions of people lost their job, home, and most were unemployed. All of the pressure was on the two presidents to handle the problem. While the first president Herbert Hoover believed that people should come together in order to the the problem, but the next president, Franklin Roosevelt, believed that the involvement of the government if very important to help the people. Therefore, in 1933 The …show more content…
At that time the Classical method seemed not working and make American economic suffered more clumsily. The Classical economists during that time could only repeat old treatment which did little to solve the depression, as the economy turned into crisis, the business-cycle went down and did not come up again by itself so the new situation and was replaced by new economists that we have known as "Keynesian" nowadays, but at that time Keynesian had not been popular yet. Keynesian belief that the government intervention will help overcome of the lack of aggregate demand will reduce the unemployment and increase growth and the government action through fiscal policy is very important unlike what the Classical belief that markets will automatically back to normal by itself. In 1933, with the new elected president, Franklin Roosevelt, the government finally get involved into the economy and played a very important role to solve and prevent the depression at that time. During the first hundred days of the new president he invented the program that is called “The New Deal” which came up with plenty of programs that purposely designed to help US pass through this hard time. The idea of The New Deal was to offer the economic relief to the suffering, monitor private industry, and the growth of the economy. Its summed up with the “Three Rs” which is relief, recovery, and reform. The US government wanted to relief the unemployed, recovery the the economy through the federal spending and job creation, and reform the capitalism which is the creation of new social welfare programs. For instance, the most important supported programs were created such Agricultural Adjustment Act (AAC), Civilian Conservation Corps (CCC), Federal Emergency Relief Act (FERA), National Recovery Act
The great depression was the worst time for American people of all the time. There were many factors that the great depression at that time, but one of biggest caused was the stock market crash in 1929, because everyone forced to sold their stocks at once and there was no enough money to pay to those people, so the stock market crashed. Millions of people lost their job, home, and most were unemployed. All of the pressure was on the two presidents to handle the problem. While the first president Herbert Hoover believed that people should come together in order to the the problem, but the next president, Franklin Roosevelt, believed that the involvement of the government if very important to help the people. Therefore, in 1933 The …show more content…
At that time the Classical method seemed not working and make American economic suffered more clumsily. The Classical economists during that time could only repeat old treatment which did little to solve the depression, as the economy turned into crisis, the business-cycle went down and did not come up again by itself so the new situation and was replaced by new economists that we have known as "Keynesian" nowadays, but at that time Keynesian had not been popular yet. Keynesian belief that the government intervention will help overcome of the lack of aggregate demand will reduce the unemployment and increase growth and the government action through fiscal policy is very important unlike what the Classical belief that markets will automatically back to normal by itself. In 1933, with the new elected president, Franklin Roosevelt, the government finally get involved into the economy and played a very important role to solve and prevent the depression at that time. During the first hundred days of the new president he invented the program that is called “The New Deal” which came up with plenty of programs that purposely designed to help US pass through this hard time. The idea of The New Deal was to offer the economic relief to the suffering, monitor private industry, and the growth of the economy. Its summed up with the “Three Rs” which is relief, recovery, and reform. The US government wanted to relief the unemployed, recovery the the economy through the federal spending and job creation, and reform the capitalism which is the creation of new social welfare programs. For instance, the most important supported programs were created such Agricultural Adjustment Act (AAC), Civilian Conservation Corps (CCC), Federal Emergency Relief Act (FERA), National Recovery Act