Background

The Great Depression in United States occurred between 1929 and 1939. It was the longest and deepest economic downturn to have ever been experienced in the history of the industrialized countries in the world. The Great Depression occurred when the stock markets in the country crashes causing millions of the investors in the country to lose their investments. [1]As a result of low investment, the economy experience high cases of unemployment, reduced consumer spending due to low purchasing power and low economic growth. By the end of 1933, millions of employees had lost their jobs while half of the banks in the country had decided to close while other had failed completely. Despite the economic reform and relief measures which had been put in place by President Franklin Roosevelt to lessen the worse impact of the Great Depression, the economy would not have been repaired until the World War II in 1939. The research will demonstrate the impact of the Great Depression economically, socially and politically.

The economic impact of the Great Depression

During the summer of 1929, the American economy was characterized by the extra- ordinary recession. At this period, the consumer spending dropped drastically causing the unsold goods to pile up in the go-downs hence causing the level of production in the country to decline.[2] In addition, the stock prices in the stock exchange markets continued to increase and by the end of the year it was impossible for the investors to forecast the future earnings. Prior to the end of the year 1929, the country experienced stock market bubble burst, where the investors decided to dump their shares mercilessly and in huge masses. During the Black Thursday, it was estimated that about 12.9 million shares were trade within one day. During the Black Tuesday which occurred five days later, the stock market analyst approximated that more than 16 million shares were traded within one day following another wave of investors panic. Following huge trading of the shares in the stock markets in the country, the shares became worthless and the investors who had acquired the shares through borrowed money were wiped out of the economy completely.

In the wake of the stock market crash in United States, the consumers’ confidence vanished. The low level of consumer spending and investors’ investment led many factors and businesses to reduce their contraction and production activities. As a result, most of the factories and industries were forced to begin firing up the workers which increased the level of unemployment in the country as well as lowering their purchasing power. For the case of the workers who were lucky to remain in the employment industry, continued receiving low wages which could not withstand the fragile economic situation. As a result of the economic instability, most of the Americans were forced to purchase on credit hence increasing their level of debt.[3] The increased cases of debt in the country were followed by increased cases of property repossessions.  Nevertheless, the entrance of the Gold Standard in the economy was a major attempt by the economists and the United States government ensures other countries especially from Europe to join in the process of fixing the currency exchange in the world. The Great Depression made many investors in United States to lose their confidence as a result of the banks solvency and demanded most of their deposits in terms of cash. The move forced most of the banks in existence to liquidate in order to retain the insufficient cash that was in their reserves. President Hoover tried to support the failing banks with the government loans in order for them to support the failing and create employment for the unemployed citizen but the situation was beyond scope and could not be controlled.

The social impact of the Great Depression

As a result of the Great Depression, there was increased mass migration of the citizens in search of better life.[4] Given most of the businesses in the economy had collapsed during the Great Depression, the crime rate increased rapidly. Most people were arrested for engaging in theft cases of food as they were unemployed and their purchasing power had declined hence leaving them with little cash to spend on food. In addition, the cases of malnutrition rose while the cases of citizens committing suicide increased drastically. Given the fact that most married men were unemployed most desperate women in the country started to engage prostitution as a means of settling their bills. The health care sector was not also spared as only the dire unhealthy cases and circumstances were reported in the hospital. [5]The level of alcoholism and cigarette smoking was on rise as most people tried to console themselves due to the economic situations they were undergoing at the time. The marriages were never spared by the Great Depression because most of the male were forced to delay getting married. On the other hand, as the life became harder for the already married people, cases of divorce were experienced in most families. In connection to this, the birth rate in the country sharply dropped as most people more so the women decided to use the various birth control measures to avoid unnecessary births.

The political impact of the Great Depression

The Great Recession and the Great Depression were similar in one way or the other in matters associated with the political arena. [6]The Great Depression started when President Hoover was in power and continued until his term of power came into an end. The Hoover together with his Republicans fueled the existence of the depression in the economy because they continued insisting for a long period of time that it was only going to happen for a short period of time. Following the president’s depression assumption that it was only temporary and was likely to control itself, the situation deteriorated and most American citizens were rendered unemployed.  Despite the fact that President Hoover was the former secretary of commerce in United States continued to emphasis that it was not the role of the government to create jobs for the citizens in order to relieve the economy from the recession. In 1932 when the Great Depression was at the peak, the citizens continued to lose their jobs and remained unemployed. It was at this time that the citizens realized the need for the change of the current Republican government and replace it with a Democratic government. As a result, the citizens brought to power President Franklin Roosevelt. During his inauguration speech in 1933 he ordered all the remaining banks to close down before the fourth banking wave had come into existence. As the current government did not have enough resources to cater for all the government workers, President Roosevelt declared that the only thing that the country would fear is the fear itself rather than the economic depression in the country.

Prior to the government realignment, it was worth to note that the Great Depression had spread from United States to other countries like: Europe, Germany and Latin America hence necessitating these countries government to also be authoritative in order to solve the Great Depression. [7]Under the leadership of President Roosevelt, a series of social programs under the name the New Deal were passed. The New Deal under the guidance of the president included: restructuring the government, building infrastructures, providing rural electrification and reconstructing the country’s social security. [8]The adoption of the New Deal transformed the United States government completely. It made the government more expansive and bigger. As a result, the government was able to reduce the current state of poverty by creating more jobs, improving the salary rate for the citizens and increasing their purchasing power hence improved economy in general. Therefore, it was the change of power  from President Hoover who was a republican to President Roosevelt that enabled the United States to change the Great Depression.

Conclusion

The Great Depression was one of the economic down turn to have been experienced by United States. The depression had economic, social and political impact for the Americans and the globe at large. Economically, the Great Depression impacted the stock markets and the banks.  It also led to the closure of most of the industries which resulted to most people becoming unemployed hence low purchasing power and lose of the consumers’ confidence. The massive sale of the stocks in the stock market results to the stocks losing in value hence lose of investors’ confidence hence low investments in the country. Low investment and lose of the customers confidence and satisfaction resulted into low productivity. As a result of high cases of unemployment most of social life in terms of marriage, divorce, birth rate, and culture and crime rate in the society was influenced negatively. Politically, the Great Depression led to transfer of power from a Republican President Hoover to a Democratic President Roosevelt. The formation of the New Deal transformed the economy as a whole in United States the world at large.