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What caused the Great Depression? What ended it?

Dittohead not!

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The subject of this thread came up in another one, where it doesn't really belong. This is my attempt to open the discussion in where it belongs.

So, what were the causes of the Great Depression? Were they similar to the recession we are (or are not, according to your perspective) coming out of currently? what ended it? Was the New Deal a positive or negative? Was it the war that really ended it? If so, does a healthy economy depend on being at war? Is war peace, as Orwell said?

Anyone want to go back to the early 1930s?
 

Fisher

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Can we go back further? The cause of the depression was the US not having enough gold to even honor its war bond debt that was payable in gold. With the dollar unhinged from gold, the markets went crazy. Why did it end? I would argue it was the post World War II economic boom.
 

grip

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The subject of this thread came up in another one, where it doesn't really belong. This is my attempt to open the discussion in where it belongs.

So, what were the causes of the Great Depression? Were they similar to the recession we are (or are not, according to your perspective) coming out of currently? what ended it? Was the New Deal a positive or negative? Was it the war that really ended it? If so, does a healthy economy depend on being at war? Is war peace, as Orwell said?

Anyone want to go back to the early 1930s?

It was a loss of faith in the banking system caused by too much debt. The Markets would have rebounded if the depositors hadn't removed their savings.
 

Beaudreaux

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The great depression was caused when my mother-in-law sat on my new sofa. It never ended. I had to buy a new one.
 

Helix

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well, there's this :

US_BNKFAIL1211_SC.jpg

as for what ended it, the alphabet programs helped some, but it was really the war that ended it permanently.
 

Dittohead not!

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It was a loss of faith in the banking system caused by too much debt. The Markets would have rebounded if the depositors hadn't removed their savings.

and the FDIC was started, so there wasn't a run on the banks this time around.
 

grip

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and the FDIC was started, so there wasn't a run on the banks this time around.

No, this was a complete collapse of funding with massive calls on debt that wasn't backed up. That's why the gov bail outs.
 

Dittohead not!

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No, this was a complete collapse of funding with massive calls on debt that wasn't backed up. That's why the gov bail outs.

at least of some of the larger entities that had invested heavily in bad mortgages, yes.
Now, had John Q. Public had tried to get all of their money out of the banks at the same time, as happened back at the beginning of the great depression, the likely result would have been, what?
 

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at least of some of the larger entities that had invested heavily in bad mortgages, yes.
Now, had John Q. Public had tried to get all of their money out of the banks at the same time, as happened back at the beginning of the great depression, the likely result would have been, what?


Wouldn't happen because the FEDs would shut them down till people cooled off. You can't even make withdrawals over what a bank says they have on hand. I had to wait 3 days once to get $5K in cash. You can get certified checks or bank drafts but not large sums of cash. And you can't wire over $50K overseas without filling out some forms.
 

Dittohead not!

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Wouldn't happen because the FEDs would shut them down till people cooled off. You can't even make withdrawals over what a bank says they have on hand. I had to wait 3 days once to get $5K in cash. You can get certified checks or bank drafts but not large sums of cash. And you can't wire over $50K overseas without filling out some forms.

It didn't happen, wasn't an issue, because people understand that the bank deposits are insured by FDIC.
 

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It didn't happen, wasn't an issue, because people understand that the bank deposits are insured by FDIC.


They're only insured for $250K per bank. And if the banks had started to fail people would've started to pull what money they did have in them. Even the FDIC can't back all that cash or would take months to get.
 

Dittohead not!

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They're only insured for $250K per bank. And if the banks had started to fail people would've started to pull what money they did have in them. Even the FDIC can't back all that cash or would take months to get.

Right, so people who don't have more than a quarter million in the bank didn't all go and try to withdraw all their money in cash right away, which would have had the same result as the run on the banks at the beginning of the great depression.

No one in their right mind would leave a quarter million in a savings account where it gathers less interest than the rate of inflation anyway.
 

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Right, so people who don't have more than a quarter million in the bank didn't all go and try to withdraw all their money in cash right away, which would have had the same result as the run on the banks at the beginning of the great depression.

No one in their right mind would leave a quarter million in a savings account where it gathers less interest than the rate of inflation anyway.

Please tell that to my elderly clients who keep buying CD's because they're "safe". Lord knows me telling them doesn't do any good.
 

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The creation of the FDIC was good, as were a few other things...but the economy was slowed by the suspension of the gold standard, and way too much government spending went on in the name of Keynes - the great destroyer of long-term economies.

FDR just threw money at inefficient people and things, believing that simply pumping government spending alone can get you out of a funk. It can on a really limited level, and only temporary.

If the New Deal was...oh, maybe 3-5 years long or so, I could see it being a good thing.

Social Security is garbage, and I'll tell you why. It's a security blanket for people of a certain age. Now, if you reach age 65, you get assistance in what you paid in, which still holds today. One problem - in 1933, the average American lived to be...62. That means, more than likely, you were never designed to collect, and only did if you essentially "cheated death". Today, the average person lives to be...78. That means that a much, much higher percentage will be dipping into a fund that was designed to pay very little. Upon implementation of the New Deal, the pay-in to pay-out ratio was 16:1. Today? Less than 4:1. You wonder why Social Security is going broke? There you go.

FDR was, without doubt, the worst president in American history. Obama couldn't hold a candle to him.
 

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The subject of this thread came up in another one, where it doesn't really belong. This is my attempt to open the discussion in where it belongs.

So, what were the causes of the Great Depression? Were they similar to the recession we are (or are not, according to your perspective) coming out of currently? what ended it? Was the New Deal a positive or negative? Was it the war that really ended it? If so, does a healthy economy depend on being at war? Is war peace, as Orwell said?

Anyone want to go back to the early 1930s?

the great depression was caused by many factors,some known during that time,others a shock.many people then had no idea what damage things like investment could cause with little oversight,and an out of control stockmarket.


what ended the great depression was ww2,the money spent during ww2 helped,but the major factor ending it was the western world adopting free trade over mercantilism and protectionism.the other large factor was the effective repeal of smoot hawley in the early 30's,which was responsible for the worldwide tarriff war and the most economically devastating law ever enacted.

fyi before conservatives even use this info,smoot hawley was signed by hoover,not fdr.
 

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well, there's this :

View attachment 67157302

as for what ended it, the alphabet programs helped some, but it was really the war that ended it permanently.

your chart also failry coincides with the ending and re implementation of gold standards,which would then show that inflation doesnt help the economy at all,but rather helps the richest americans.

after the depression,the gold standard was suspended,after ww2,it was reinstated,and long prosperity until the 70's when it was ended.

causation without correllation is a bitch aint it:lol:
 

Carjosse

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A lot of stuff caused the Great Depression that you could write 1000s of pages on it but the one thing that did end it though was government spending.
 

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Cause. Free Trade and scams of Wall Street

Cure - Mercantilism from WW2 and pro USA worker items like the CCC.
 

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Easy credit was a big problem and because for both people getting thing's that they cant afford for both the depression and recession. Housing going down both the recession and depression . Stocks both recession and depression . Farming just depression . industries barley making a profit( steel automobiles construction consumer goods ) both. Banks failing both . They have a lot of similarities except it did not turn out so awful since we now have several safety nets in place so America does not practically become a third world country like it did during the great depression . Ironic we are going over this in class this quarter .
 

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Can we go back further? The cause of the depression was the US not having enough gold to even honor its war bond debt that was payable in gold. With the dollar unhinged from gold, the markets went crazy. Why did it end? I would argue it was the post World War II economic boom.

And the boom was directly correlated to the war as we were the only country that hadn't had its info structure and workforce decimated.
 

Fisher

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And the boom was directly correlated to the war as we were the only country that hadn't had its info structure and workforce decimated.

Pretty sure Canada came through it pretty unscathed.
 

Dittohead not!

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Easy credit was a big problem and because for both people getting thing's that they cant afford for both the depression and recession. Housing going down both the recession and depression . Stocks both recession and depression . Farming just depression . industries barley making a profit( steel automobiles construction consumer goods ) both. Banks failing both . They have a lot of similarities except it did not turn out so awful since we now have several safety nets in place so America does not practically become a third world country like it did during the great depression . Ironic we are going over this in class this quarter .

and easy credit was one of the factors in the latest recession.
The safety nets you mention are under attack by the extremists, who seem to think that the real reason the depression ended was spending for WWII, and not the New Deal, FICA, SS, etc. What do you think of that?
 
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