Great Depression

Definition

The Great Depression was a severe worldwide economic downturn that lasted from 1929 until the late 1930s, marked by significant declines in industrial output, widespread unemployment, and a drop in consumer spending. It was a pivotal moment in history that not only transformed economic policies but also altered the role of government in the economy and society, leading to major public affairs developments.

5 Must Know Facts For Your Next Test

1. The Great Depression began with the Stock Market Crash of 1929, which erased billions of dollars in wealth and led to bank failures and loss of savings.
2. Unemployment rates soared during the Great Depression, reaching around 25% in the United States at its peak, profoundly impacting families and communities.
3. The Great Depression prompted a significant shift in governmental policies, resulting in increased federal involvement in the economy through programs like the New Deal.
4. The economic crisis led to social changes as well, including shifts in labor movements, with workers organizing for better wages and conditions amidst widespread poverty.
5. Globally, the Great Depression affected economies across Europe and beyond, leading to political instability and contributing to the rise of totalitarian regimes.

Review Questions

• How did the Great Depression influence changes in government policy and public affairs in the United States?
  • The Great Depression prompted a significant transformation in government policy, particularly through the implementation of Franklin D. Roosevelt's New Deal. This series of programs expanded federal involvement in economic recovery efforts, shifting public expectations about the government's role in providing social safety nets and economic support. The crisis highlighted the need for regulatory frameworks to stabilize markets and protect citizens, ultimately reshaping public affairs.
• Discuss the social impacts of the Great Depression on American society and how it affected public attitudes toward government intervention.
  • The Great Depression had profound social impacts on American society, including widespread unemployment and poverty that altered family dynamics and community structures. As more citizens relied on government assistance for survival, public attitudes shifted towards favoring greater government intervention. This era saw increased support for welfare programs and labor rights movements, reflecting a changing perspective on the responsibility of government to its citizens.
• Evaluate the long-term consequences of the Great Depression on global economic policies and international relations in subsequent decades.
  • The long-term consequences of the Great Depression significantly influenced global economic policies and international relations. The economic instability fostered by the depression led many countries to adopt protectionist measures, which strained international trade relationships. Furthermore, it contributed to political upheaval in various nations, including the rise of totalitarian regimes that promised stability amid chaos. These developments set the stage for significant geopolitical tensions that culminated in World War II and shaped future economic cooperation efforts like Bretton Woods.

Related terms

New Deal:

A series of programs and reforms introduced by President Franklin D. Roosevelt aimed at addressing the economic fallout from the Great Depression through job creation and economic recovery.

Stock Market Crash of 1929: The catastrophic collapse of stock prices in October 1929 that triggered the Great Depression, leading to widespread financial panic and loss of wealth.

Public Works Administration: A New Deal agency created to provide jobs through large-scale public works projects aimed at rebuilding the nation’s infrastructure during the Great Depression.