American Great Depression

'The economy of America was a bubble fit to burst'. Argue for or against this statement with your knowledge of the reasons for the depression.

'The economy of America was a bubble fit to burst' is a fitting statement to make in comparison to the great depression of America during the 1920s and 30s, and I agree with it; this is because the stock market was beginning to crash, and when news of its status reached American citizens, people began to resort to panic, throwing in as many shares as they possible can, which only caused the market to crash even further, until “The Great Crash” officially became an official matter. Because the economic system was so unstable at this time, it would easily collapse beneath itself and its citizens, like a needle bursting a bubble, it was very fragile.

When the stock market crashed in October 1929, the nation plummeted into a major depression. The worldwide demand for agricultural goods during World War I vanished after the war and rural America experienced a severe depression throughout most of the 1920s. This lead to banks foreclosing farm mortgages and by the early 1930s thousands upon thousands of American farmers were out of business. Major businesses increased profits through most of the decade while wages remained low and workers were unable to buy the goods they had helped to produce. The financial and banking systems were very unregulated and a number of banks had failed during the 1920s. The construction and automotive industries, whose booming business had been made possible by the prosperity earlier in the decade, slowed. Declining sales resulted in higher rates of unemployment, and the needle was pushing itself further into the bubble which was the American economy.

America was witnessing a breakdown of the Democratic and free enterprise system as the US fell into the worst depression in history. The economic depression that troubled the United States and other countries was severe. At the depth of the...