Abouts On The Great Depression :: essays research papers

Abouts On The smashing DepressionTo my amazement the Great Depression serves as a natural debating pointthat "justifies" or "refutes" various frugal policies. The Great Depressionand the New Deal are complex topics that are free to many interpretations. TheGreat Depression was the worst economic slump ever so in U.S. history, and onewhich spread to virtu exclusivelyy only of the industrialized world.      eyesight the order in which events actually occurred dispels many mythsabout the Great Depression. peerless of the greatest of these myths is that establishment incumbrance was responsible for its onset. Truly giganticintervention began only under the presidency of Franklin Roosevelt in 1933, whowas sworn in afterwards 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 turn in the t heoriesof John Maynard Keynes. Keynes is known as the "father of modern economics"because he was the first to accurately describe some of the causes and cures for recesss and depressions.     In a mean(prenominal) economy, Keynes said, there is a philippic flow of funds. My spend becomes part of your earnings, and your spending becomes part of myearnings. For various reasons, however, this circular flow can falter. People scar hoarding money when quantify 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 Reserve System, should expand the money supply.This would put more money in peoples hands (through the multiplier effect), advocate consumer confidence, and compel them to start spending again.     A depression, Keynes believed, is an especially se vere recession inwhich people hoard money no matter how very 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 " set the pump" of theeconomy. I think that most economists believe that only massive U.S. defensespending in preparation for World War II cured the Great Depression.     After the success of Keynes economic beliefs were proven, almost allfree governments around the world became Keynesian. These policies havedramatically reduced the malignity 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 Roaring Twenties were an era dominated by Republican presidentsWarren Harding (1920-1923), Calvin C oolidge (1923-1929) and Herbert Hoover(1929-1933). Under their conservative economic doctrine of laissez-faire