Great Depression Vs Recession

1742 Words 7 Pages
Throughout history, there have been two major economic downturns. The Great Depression and the Recession of 2008 both occurred due to poor finical policies and excessive spending. Both events left many people feeling hopeless and vulnerable. A comparison of the Great Depression Era and The Recession of 2008 reveals similarities in causes and effects economically, socially, and politically.
Life after the war took a toll on many Americans. It left many people confused and upset. Many people lost hope in reason and progress. While it seemed like the economy was booming compared to other countries, in reality many workers could still not afford to support their families. Since people were not able to buy certain things, factories began to slow
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Consumerism was at an all-time high. Without having to worry about the war and the economy anymore, Americans were able to spend their money on the latest items available. New technologies became available for Americans to purchase such as, the automobile, household appliances, and other mass produced products. In order to pay for these new items, many stores offered a buying on margin plan. This allowed Americans to pay for the items over a certain period of time. Buying on margin became a risky situation for many stores because the stores were basically giving the people the money to buy the items. Sometimes, the people were unable to pay back the amount they owed. Banks also started to loan out money to Americans in order for them to pay for certain items. This also was risky because the bank was never one hundred percent sure to get their money back. During the twenties, the economy grew due to the technology advances and growth within …show more content…
The wages began to grow with the economy which opens the door for consequences. Americans relied to heavenly on their paychecks because they lived paycheck to paycheck. If their paycheck was to change, then their daily life was affected. Throughout the decade, the middle classes wages went up six percent, the lower classes wages went down five percent and the upper classes wages went up forty-one percent. The inequality continued to spread as CEOs started making 296 times more than the average worker. Since the lower class was not able to meet ends meet, they started to take out loans, resulting in higher credit. Credit card debts were now at an all-time high. Americans believed buying on credit was not bad and started buying excessively. The inequality throughout the social classes made life more difficult in this

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