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The Great Depression: People
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The Great Depression was not a sudden collapse. The stock market steadily recovered after the crash of 1908 and recovered to early 1929 levels by the April of 1931. Together, government and business actually spent more in the first half of 1930 than the previous year. However, leery consumers cut back their expenditures by ten percent. Also, a severe drought ravaged the agricultural heartland beginning in the summer of 1930. In the spring of 1931, credit was ample and available at low rates, but people feared for the future and were reluctant to add new debt by borrowing.
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The Great Depression changed the lives of people who lived and farmed on the Great Plains and in turn, changed America. The government programs that helped them to live through the 1930s changed the future of agriculture forever. Weather touched every part of life in the "Dirty 30s": dust, insects, summer heat and winter cold. York County farm families didn't have heat, light or indoor bathrooms like people who lived in town. Many farm families raised most of their own food – eggs and chickens, milk and beef from their own cows, and vegetables from their gardens.
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The Great Depression took place from 1930 to 1939. During this time the prices of stock fell 40%. 9,000 banks went out of business and 9 million savings accounts were wiped out. 86,00 businesses failed, and wages were decreased by an average of 60%. The unemployment rate went from 9% all the way to 25%, about 15 million jobless people.
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Roosevelt and The New Dealers accused excess of large businesses as the root cause of the Great Depression. The New Dealers planned to empower labor unions and poor people and to curb the power of big businesses by raising corporate profit tax. They instituted economic regulations. New dealers busted many large corporate houses ... weakening the economy and perpetuated the Great Depression.
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Macroeconomists, such as Ben Bernanke, have revived the debt-deflation view of the Great Depression originated by Arthur Cecil Pigou and Irving Fisher. In the 1920s, widespread use of the home mortgage and credit purchases of automobiles and furniture in the U.S. boosted spending, but created consumer debt. People who were deeply in debt when a price deflation occurred were in serious trouble — even if they kept their jobs — and risked default. They drastically cut current spending to keep payments on time... lowering demand for new products. Furthermore, the debts grew when prices and incomes fell 20-50%, but the debts remained at the same dollar amount. With future profits looking poor, capital investment slowed drastically.
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The widespread prosperity of the 1920s ended abruptly with the stock market crash in October 1929 and the great economic depression that followed. The depression threatened people's jobs, savings, and even their homes and farms. At the depths of the depression, over one-quarter of the American workforce was out of work. For many Americans, these were hard times.
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