No one expected the Great Depression to end overnight and it seemed like it was going to last for a very long time. It was believed that a major event would have to take place to bring about change to the world. Historians have argued that the beginning of World War II in 1939 was the event that marked the end of the Great Depression across the world.
Reasons for the end of the Great Depression
The main reason for the end of the Great Depression was the start of the war as it caused factories to reopen their businesses. This time, however, it was to manufacture weapons, tanks, planes, and ammunition rather than radios and automobiles. As the factories started working again and the armies started recruiting men, the unemployment rate dropped significantly.
The “New Deal” programs that were launched by President Roosevelt in 1933 were another factor that helped in ending the Great Depression. The New Deal helped the government reform every aspect of the American economy in a way that helped it recover from the economic depression.
Farming conditions also improved once the 10-year drought that started in 1929 ended and the rain came back to the Midwest. Farms went back to work and the unemployment rate decreased significantly.
Results of the Great Depression
The biggest disaster that happened as a result of the Great Depression was the failure of the banking system. People were unwilling to trust banks again or buy anything using credit. Consumption behavior of the people changed as they preferred to buy only the necessities using cash. Many historians believe that the Great Depression left the United States stronger and taught its people how to survive hardship.
Effects of the New Deal
Just like the Great Depression, the New Deal succeeded in changing the way the American people used to think about what the government should do in the market. For example, one of the laws that was passed as a part of the New Deal was the Social Security Act. This program essentially collects taxes on income and turns it into a retirement program that helps people have a source of income after they are retired. To this day, this program is still a huge part of the American government and the American people’s lives.
Other programs to fix other aspects of the economy helped the people regain trust in the banking system and the stock market. One program is the FDIC insurance program, which is responsible for ensuring the safety of your money while it is in the bank. In addition, the stock market laws and regulations were enacted to protect the American people. The stock market regulations prevented companies from lying about their profits so that a company’s value in the stock market would never exceed its true value in the real world. The Great Depression lasted for 10 very long years and negatively affected the lives of Americans from 1929 to 1939. However, it is now seen as a necessary evil that helped the country and the people evolve and mature.