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The Great Depression

The year of 1929 will forever be a part of history. And unfortunately it is not for a positive reason. The summer of 1929 was the beginning of a recession for the United States of America, and many people were optimistic in it passing. But, they could not have been any more wrong. Approximately six months later on October 29, 1929, what is now referred to as Black Tuesday, marks the beginning of The Great Depression.

On October 29, 1929, the stock markets crashed and sent the world into an economic depression. But this was no ordinary depression, like the earlier one the United States had experienced before. This worldwide economic depression was the longest lasting and most severe depression that the Western World had ever seen.

From its start in 1929, this depression did not fully end until 1939, give or take a few years. Some countries, excluded the United States, began to recover and see economic improvements as early as 1933. World War II was a major factor for many countries, included the United States, in propelling the recovery from this damaging depression.

The Great Depression is marked by many major issues. Countries experienced drops in major aspects such as:

  • Tax Revenue
  • Individual Income
  • International Trade
  • Prices
  • Profits

By 1933, there were between 13 and 15 million Americans that were unemployed. The unemployment rate for 1993 was as low as 25% and as high as 33% in some countries. Also, approximately half of all of the banks had failed. However, for some countries, 1933 was when things began to turn around, and the unemployment rate had dropped, lifting away some of the burdens. Meanwhile, the Unite States continued to suffer for more years to come.

By the year of 1940, the rate of unemployment had dropped down to 15%, which is much better than the 25% in 1933. Improvement were being seen, and things were getting better.

Another problem that impacted the United States more than anywhere else was the fact the throughout the entire world. The U.S was the only industrialized country that did not have some social security, of insurance plan for unemployment. This led to the enactment of the Social Security Act in 1935, which provided Americans with pension for old age, disability, and unemployment.

As things started to get better, World War II was the deciding factor. The attack on Pearl Harbor in 1941 was the mark of the United States’ declaration of war and the mark of increased production, which led to more employment. Industrial production and the unemployment rate were inversely proportional, and as production went up, unemployment went down. From then on, the economy picked itself back up and left The Great Depression behind.