Economic Apocalypse ver.

1930

The Great Depression of 1930– The time when the most powerful state of today, United States of America, once experienced
a devastating and down turning crisis that triggered to over a decade of economic hardship and suffering. Beginning in the United
States, the Great Depression was a worldwide economic depression and it was considered as the longest, deepest, and most
widespread depression of its kind in the 20th century. The economic downfall began on September 4th, 1929, through various factors
such as a stock market crash, bank failures, a reduction in purchasing, American economic policy, and drought conditions. However,
the horrible economic history bridged the birth of school of thoughts which serve as the foundation of understanding economics of the
present.

I was surprised and felt gloomy and annoyed at the same time on how the depression oppressed the American people and its
economy in the past. From the "Roaring Twenties, investing money in the stock market became the hope for many to make a fortune.
People were borrowing money to buy stocks and then using that stock as collateral to buy more stocks with borrowed money. As stock
prices began to fall, people began to sell their stocks anxiously, sometimes being unable to find buyers out any price. Then, the huge
stock market crash happened, they rushed out to the banks to withdraw their money but some banks were not able to produce
completely as they became insolvent very quickly as the stock value was too close to zero. Afraid of the regression of savings, people
stopped buying things and, when people stopped buying things, businesses closed, not employing people, reducing income and
therefore creating a chain reaction. But for me, what fuelled market crash is the prevailing case of income inequality. Though the past
decade where industries expanded rapidly, wages of workers did not increase to the same degree that corporate profits increased.
Products were being made, but many were no longer able to afford them. Slow spending became a source of stock price declining.
Furthermore, poor government decisions intensified the situation and fall into the great depression. The first thing that the government
failed to do was to provide money when the system needed it. They never lend money to insolvent banks. It is silly to think that there
was a stock market crash during that time which made the almost banks insolvent so why would government still chose not to supply
money? Second, raising taxes was very wrong. It worsened the situation whereby they took away the very little money of every
household, which are budgeted on goods and services. Lastly, it was a bad response to raise tariffs and quotas. They prioritized their
domestic industries and consequently raised tariffs on foreign goods in order for the people to buy their local products. Little did they
know that the decision they made was copied which in turn their goods have also high tariffs in other countries which resulted to loss of
export opportunities. And when they could not sell, there is no market for goods and services at all. The government also denied
international market which could have helped them to avoid more depressing economic crisis.

The years of the Great Depression portrayed a great economic uproar and downfall for the state and the world. It was not only
the economy that suffered but also its people. It is truly hard to solve a problem when the solutions you have given are not the solution
to it. The past has given us the chance to learn, to understand and to apply a fruit, school of economic thoughts, on how to avoid letting
a recession turning into a depression of that extent ever again.

Citations:

https://www.reed.edu/economics/parker/f10/201/cases/depression.html

https://www.cengage.com/economics/tomlinson/transcripts/8557.pdf

https://www.thestreet.com/politics/great-depression-causes-14663720