Great Depression

Definition

The Great Depression was a severe worldwide economic downturn that lasted from 1929 until the late 1930s, characterized by massive unemployment, plummeting production, and a significant decline in consumer spending. This economic crisis prompted a profound change in government policies and led to the establishment of various federal social programs aimed at providing relief and support to struggling citizens.

5 Must Know Facts For Your Next Test

1. The stock market crash of October 1929 marked the beginning of the Great Depression, leading to widespread financial panic and bank failures.
2. At its peak, unemployment soared to about 25% in the United States, leaving millions without jobs or income.
3. The Great Depression prompted significant changes in government intervention in the economy, with an emphasis on providing direct assistance to those in need.
4. Federal programs established during this period included job creation initiatives, public works projects, and food assistance programs aimed at alleviating poverty.
5. The long-lasting effects of the Great Depression influenced future social policies and laid the groundwork for the modern welfare state in America.

Review Questions

• How did the Great Depression influence government intervention in the economy?
  • The Great Depression marked a significant turning point in how governments approached economic crises. Faced with unprecedented unemployment and poverty levels, governments shifted from minimal intervention to active involvement in economic recovery. This included implementing relief programs like job creation initiatives and direct assistance, which laid the groundwork for future federal social policies aimed at providing support during times of economic hardship.
• Discuss the role of the New Deal in shaping federal social programs during and after the Great Depression.
  • The New Deal played a crucial role in transforming federal social programs by introducing a range of initiatives aimed at economic recovery and social welfare. Programs such as Social Security and unemployment insurance were established to provide safety nets for vulnerable populations. This expansion of federal responsibility laid the foundation for a more robust welfare system that continues to influence social policy today.
• Evaluate the long-term impacts of the Great Depression on American social policy and its relevance to contemporary issues.
  • The Great Depression had profound long-term impacts on American social policy by establishing a precedent for federal involvement in economic and social welfare issues. The lessons learned from this era led to an enduring commitment to government responsibility in providing economic stability and assistance to citizens. Contemporary issues such as income inequality and unemployment continue to be shaped by policies originating from this period, highlighting the ongoing relevance of the Great Depression in discussions about social policy today.

Related terms

New Deal: A series of programs and reforms introduced by President Franklin D. Roosevelt in response to the Great Depression, designed to provide relief for the unemployed and stimulate economic recovery.

Unemployment Rate: A measure of the prevalence of unemployment in an economy, calculated as the percentage of the total labor force that is unemployed but actively seeking employment.

Social Security Act: A landmark piece of legislation passed in 1935 that created a system of old-age benefits, unemployment insurance, and aid for dependent children, significantly shaping the U.S. social welfare system.