The Great Depression – How Much Should the Government Intervene in the Economy?
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The Great Depression Essay
How much should the government intervene in the economy?
October 29th, 1929 known as black Tuesday marked a turning point in US History. Ir was the day the stock mardeted crashed and so began Americas Great Depression. Though the causes where many it effect on the American public was clear. Thousands of Americans lost everything in the crash and now had the awful task of trying to survive. Yet, many Americans were unsatisfied with Presiden Hoovers approach of letting the economy fix itself. Then 1932 Franklin Roosevelt was elected president and with him came his “New Deal.” This New Deal would fundamentally change the role of the government in the economy. Yet, by the end of Roosevelt second term the New Deal had failed to end the Depression. Instead, it raised the question of How much should the government intervene in the Economy? Yet, the causes of the Great Depression and actions of New Deal that show the need for stronger government intervention in the Economy to make sure the economy remains stable.
The roots of the depression could be trace to the Actions of the three republican presidents that promoted a capitalist economy. One example was president Harding who wanted less government is business more business in government. This shows us that president Harding did not want the government to intervene in helping to bring up the economy, he only wanted the business to help the government. Another example was president Hoover who wanted to encourage business leaders to work together to improve economic efficiency. This shows us that president Hoover wanted business leaders to take the responsability to help to make a better economy. These two details show that these presidents helped promote a capitalist economy and this helped to cause the depression.
The promotion of a capitalist economy helped to cause the Great Depression. One example was the bank failures. Throughout the 1930s over 9,000 banks failed. Bank deposits were uninsured and thus as banks failed people simply lost their savings. The government did not regulate the banking industry. This exacerbated the situation leading to less and less expenditures. Another example was overproduction. U.S. factories produced too many godos.By the end of the “Roaring 20s, American businesses produced more goods than Americans could buy. Eventually factories cut production and fired extra workers which caused the economy to slow down because in capitalism there were no or limited government. These two details show the promotion of a capitalist economy helped to cause the Great Depression. The New Deal would then change this relationship between the government and the economy.
Roosevelts New Deal fundamentally changed the relationship between the Government and Economy. One example was the Baking Act of 1933 which guaranteed