The Great Depression 03 13 2014 I Scope Depression spread from the US dating back from stalk maret crash of 1929 Industrial giants need raw materials that came from countries that did not have this same crash had an excess of materials that couldn t be produced to sell in the depressed countries Unemplyed to great extent Soviet Union was The one country fairly immune to it because it did not partake in a great deal of international trade II What Caused the Great Depression A Why Did It Happen Overproduction and underconsumption 1 3 of nation is farmers and stalks are dropping distribution of wealth changes o wealthy have more of the money o less money spent on food and more just invested in stalks and production for consumers losing all their money o Less business in automobile industry and housing Many people had been buying on credit B Why Did It Happen When it Did In the 1920s there was a Credit binge by workers stalk speculators real estate market When stalk market crashes all of these credit holders were in trouble because a lot of banks were failing and started calling their loans decreasing amount of money in circulation When banking system collapses this is when the great depression REALLY takes hold C Why Did It Spread Abroad 1929 was a dominant industrial output force and was second biggest importing nation These outputs and inputs fell by 70 cycle is broken o US called loans to france and England back who called for reparations from Germany who had been borrowing money from the US who couldn t wouldn t loan them any more money D Why Did It Last So Long Lasted more than decade as opposed to 4 or 5 years There was no dricing force to fuel economy o RRs Automobiles Greater wealth distribution TERM Camsian Fromula o GOV needs to spend money to get money back to people and Benvernaky monetary contraction caused it not enough circ o Fed allowed circulation to shrink and that caused the banks into the economy to fail o New Deal wasn t really putting money into the economy because national deficit was not okay yet II Economic and Political Consequences A From Economic Liberalism to the Welfare State Leize Faire o BAD o Britain abandons free trade o Agriculture US puts in price supports o Classic economic liberalism is no longer big o Emergence of the welfare state in the US and other places around the globe B Political Consequences Marx communism Facissm o Germany and Italy Democratic Capitalism o More social welfare o FDR New Deal 03 13 2014 03 13 2014