America's Debt Structure

711 Words2 Pages
bulb-icon

Recommended: Economic impacts of the great depression

Several factors contributed to the Great Depression. A few being maldistribution of purchasing power, the credit structure of the economy and America's debt structure.The Great Depression can be considered inevitable due to the fact that there was no primary reason for the cause of the Great Depression, but many components played a role. America's horrible diversification in purchasing power was just one reason why the Great Depression occurred. During the late 1920s, America's automobile and construction industries began to plummet. This became an issue since the two industries largely contributed to the prospering economy. Spending on construction fell from $11 million to $9 million dollars, from 1926 to 1929. Within nine months, …show more content…

European countries had trouble paying off the money they owed America at the end of World War I in 1918. Germany and Austria were required to pay reparations, which allowed the European countries to pay off some of their debt, but not enough. American decided, instead of forgiving or minimizing the debt, they would offer loans to pay it off. As a result, larger loans were formed and foreign countries could not even use international trade as a tactic to reduce the loans because of the tariffs America implemented. Also, European industries were very productive in the 1920s, therefore, the demand for American products decreased. Without international trade, European countries would enter into the Depression as well. The debt structure was definitely a cause of the Great Depression, but it resulted from the war and lack of international trade. It is evident that the great depression was inevitable since there were several components that contributed to the various causes of the Great Depression. Maldistribution of purchasing power was a factor of the Great Depression, which occurred because of the market crash. While the credit structure was due to consumers not ameliorating loans, and the debt structure from the war and lack of international trade. All of these elements lead to the Depression in

Show More
Related

  • FDR Election DBQ Essay

    524 Words  | 2 Pages

    In the Roaring Twenties, people started buying household materials and stocks that they could not pay for in credit. Farmers, textile workers, and miners all got low wages. In 1929, the stock market crashed. All of these events started the Great Depression.

    Read More

  • The Great Depression of the 1930s in Canada

    1319 Words  | 3 Pages

    There are several causes of the Great Depression which Michiel Horn touches on throughout his writings. The initial tool that he used to help understand the situation was to look at statistical data from that time. Through use of this data, a greater understanding of the physical hardships could be quantified and compared to present day. The reading begins with statistics about the shocking rate of unemployment. In 1933, at the height of the depression, the unemployment rate was between 19.3and 27 percent. The industrial activity in 1933 was only 57 percent of the average activity for the years 1925-29. The causes for the Great Depression were easy to see, but hard to fix. The problems included the inability of foreign countries to purchase surplus goods produced by other countries. Before the Great Depression, the British used this tactic to stabilize the market. Unfort...

    Read More

  • The Great Depression in Canada

    885 Words  | 2 Pages

    There were many causes for the Great Depression. The first and one of the largest was the stock market crash. Before 1929 the stock market was flourishing and everyone wanted to buy stocks. People were so confident in the stock market that they were buying “on margin”, which meant that brokers would lend them 10% of the money they invested (D1). The problems began when stocks were being over speculated. When people began to realize this, they began selling there shares. On October 29, 1929, 16 million shares were sold (D9). This day became known as “Black Thursday”, the day the stock market crashed (D12). The second reason was the overproduction of goods. Factories had already produced too many goods and now there was no demand for them. The government began to raise tariffs to protect Canadian industries but things only led downhill from there.

    Read More

  • The Debt Snowball

    618 Words  | 2 Pages

    When you get to the point where debt becomes too much you begin to search for a way out. There are many different options to get rid of their debt; one option is the debt snowball. This debt relief option sounds more unusual than it really is.

    Read More

  • President Herbert Hoover As The Cause Of The Great Depression

    733 Words  | 2 Pages

    Some say that the great depression was caused partially by social democracy and planned economies. And although this could be true, it originally started from debts from World War I, and of course the stock market crashing in 1929.

    Read More

  • The Inevitable Causes Of The Great Depression

    863 Words  | 2 Pages

    However, the prosperity depended only on these few basic industries, thus, the lack of diversification in the American economy remained a great weakness, as it made the Great Depression inevitable. The expenditures on construction fell from $11 billion in 1926 to under $9 billion in 1929, and automobile sales fell by more than a third in the first nine months of 1929. Therefore, when these overinvested industries began to decline in the late 1920s, newer industries such as chemicals, electronics, petroleum, and plastic began to emerge to replace the automobile and the construction industries.

    Read More

  • The Great Depression and John Steinbeck's The Grapes of Wrath

    1699 Words  | 4 Pages

    A major cause of the Depression was that the pay of workers did not increase at all. Because of this, they couldn't afford manufactured goods. While the factories were still manufacturing goods, Americans weren't able to afford them and the factories made no money (Drewry and O'connor 559). Another major cause related to farmers. Farmers weren't doing to well because they were producing more crops and farm products than could be sold at high prices.

    Read More

  • The National Debt

    1565 Words  | 4 Pages

    Every day in New York City, hundreds of people walk past a huge digital billboard with giant numbers across its face. Each person who walks past this billboard sees a slightly different arrangement of numbers, growing larger every second. This board is the National Debt Clock, representing the over 14 trillion dollars currently owed by the United States. While some people claim that the national debt is caused by the falling economy, most maintain that the debt itself causes the poor economy (Budget Deficits 2007). Rising debt leads to higher interest and investment rates, and cuts into our national savings. Ignoring the national debt leaves the major burden of paying it off to later generations, while meanwhile allowing our country’s economy to further drop and our dependency on other nations to rise.

    Read More

  • American Culture and Lifestyle During The Great Depression

    1532 Words  | 4 Pages

    The Great Depression was one of the most important historical events that has happened within the last century that impacted every Americans life one way or another. There were many factors that could be an explanation of why The Great Depression happened, but there is no one definitive list of the reasons of what caused The Great Depression. It was a mixture of events in the United States and outside of it that probably led to this period of time to happen. The main reason that everyone could agree on was the event of the Wall Street Crash of 1929. Because of The Crash, it made people go on a bank run which made thousands of banks to close because they simply did not have all the money for all the people wanting to withdraw their savings. Because everyone was trying to take their savings out, most people were turned down by the bank and essentially lost of their savings in the bank. The banks were failing and because they had no more money left, this stopped the banks from having available credit for people to use which made matters even worse for the people. This leads people to poverty and were left with nothing. Because people were poor and were scared of spending their money now, it made people stop buying extra things that weren't essential to live. This was the cause of the unemployment rates during this time period because if no one was buying anything, then there was no reason to keep extra workers for things people are not buying.

    Read More

  • The Great Depression and the New Deal

    986 Words  | 2 Pages

    The Great Depression was in no way the only depression the country has ever seen, but it was one of the worst economic downfalls in the United States. As for North America and the United States, the Great Depression was the worst it had ever seen. In addition to North America, the Depression greatly affected Europe and other various countries throughout the world significantly during the 1920’s and 1930’s. The Great Depression was caused by the collapse of the Stock Market, which happened in October of 1929. The crash exhausted about forty percent of the paper values of common stocks. It was the worst depression due to the fact that at the time of the Great Depression the government involvement in the economy was higher than it had ever been. A unique government agency had been set up exclusively to prevent depressions and their related troubles for instance bank panics. All of ...

    Read More

  • National Debt Essay

    1380 Words  | 3 Pages

    The national debt surfaced after the revolution when the United States government had to borrow funds from the French government and from the Dutch bankers. By 1790, the U.S. government accumulated millions in debt, but no one knew precisely how much. The Constitution mandated that the new government take over the debts of the old government under the Articles of Confederation.

    Read More

  • The Great Depression

    944 Words  | 2 Pages

    Great Depression was one of the most severe economic situation the world had ever seen. It all started during late 1929 and lasted till 1939. Although, the origin of depression was United Sattes but with US Economy being highly correlated with global economy, the ill efffects were seen in the whole world with high unemployment, low production and deflation. Overall it was the most severe depression ever faced by western industrialized world. Stock Market Crashes, Bank Failures and a lot more, left the governments ineffective and this lead the global economy to what we call today- ‘’Great Depression’’.(Rockoff). As for the cause and what lead to Great Depression, the issue is still in debate among eminent economists, but the crux provides evidence that the worst ever depression ever expereinced by Global Economy stemed from multiple causes which are as follows:

    Read More

  • Causes Of The Great Depression Essay

    1111 Words  | 3 Pages

    The Great Depression was the longest American slump in the economy to ever occur. The Great Depression lasted for about a decade between 1929 and 1939, the dates of the Stock Market Crash of 1929 and the starting of World War II. A number of factors actually caused the Great Depression. One commonly known factor said to have caused the Great Depression is the Stock Market Crash of 1929, although this is not directly correct. The market crash was only a symptom of, as well as a transition into, the Great Depression. Other symptoms and causes includes, wealth inequality, overproduction, stock speculation, excess loaning, deflation, unemployment, and no profits.

    Read More

  • The Great Depression And The Bay Area....

    721 Words  | 2 Pages

    The Great Depression progressively got worse and then progressively got better. Coming in and out of the depression was not an over night thing, It included lots of planning and action. There were a few major causes of the Great Depression,. The United states had three consecutive conservative presidents in the 1920's Harding, Coolidge, and Hoover. They all believed in mechanization which in turn put thousands of people out of work, and the trickle down theory where the money that the rich spent was supposed to somehow make it’s way though the system to the poor.

    Read More

  • The United States National Debt

    820 Words  | 2 Pages

    On the Sixth Avenue in Manhattan, there is a national debt clock that shows the amount of United States national debt. The clock was first installed in 1989, and can show up to ten trillion dollars. It ran out of digits in October 2008 when the sum of debt exceeded the amount. A new clock with two extra digits is going to be installed (Izzo 2 ).

    Read More

More about America's Debt Structure

Open Document