Abouts On The Great Depression :: essays research papers

Abouts On The Great DepressionTo my amazement the Great Depression serves as a natural debating pointthat "justifies" or "refutes" respective(a) economic policies. The Great Depressionand the New Deal are complex topics that are open to many interpretations. TheGreat Depression was the tally economic drop-off ever in U.S. history, and onewhich spread to virtually all of the industrialized world.     Seeing the order in which events actually occurred dispels many mythsabout the Great Depression. unrivalled of the greatest of these myths is that regime intervention was responsible for its onset. Truly massiveintervention began only under the presidency of Franklin Roosevelt in 1933, whowas sworn in after the worst had already hit. Although his New Deal did not cureit, all the leading economic indicators improved during his tenure.     To understand the Great Depression, it is important to know the theoriesof John Maynard Keyn es. Keynes is cognize as the "father of modern economics"because he was the first to accurately describe some of the causes and cures forrecessions and depressions.     In a normal economy, Keynes said, there is a visor flow of money. Myspending aims part of your earnings, and your spending becomes part of myearnings. For various reasons, however, this circular flow can falter. Peoplestart hoarding money when times become tough but times become tougher wheneveryone starts hoarding money. This breakdown results in a recession.     To get the circular flow of money started again, Keynes suggested thatthe central bank, the Federal declare System, should expand the money supply.This would put more money in peoples hands (through the multiplier effect),inspire consumer confidence, and compel them to start spending again.     A depression, Keynes believed, is an especially sinful recession inwhich people hoard money no matter how much the central bank tries to expandthe money supply. In that case, he suggested that government should do what thepeople were not start spending money. He called this "priming the pump" of theeconomy. I think that most economists believe that only massive U.S. abnegationspending in preparation for World War II cured the Great Depression.     After the success of Keynes economic beliefs were proven, almost allfree governments or so the world became Keynesian. These policies havedramatically reduced the severity of recessions since then, and appear to havecompletely eliminated the depression from those who follow such economic beliefsthroughout the world.                    Events of the 1920s     The howl Twenties were an era dominated by Republican presidentsWarren Harding (1920-1923), Calvin Coolidge (1923-1929) and Herbert Hoover(1929-1 933). Under their conservative economic philosophy of laissez-faire