Historical Significance
The Great Depression vs. The Great Recession
The Great Depression• The Great Depression was created on October 1929 when the stock market crashed which caused banks to fail, which lead businesses to shut down, and made millions of Americans unemployed.
•Currencies backed by precious metals (Gold, silver, animal pelt, etc. • The country experienced deflation, high unemployment, and slow growth. • There was a big increase of unemployment from people looking in the same places for jobs in America. • In 1940 two million people fled the Great Plains and moved to California in search of jobs. • Banks closing caused another panic across the country. People were afraid they would lose their own savings and rushed to banks to see if they were still open to withdraw their money. • During this time the unemployment rate was at 25%.There were huge waves of bankruptcies, bank runs, and defaults during the Great Depression. • The key players were people and the depression was man made when bank loans went bad. • The Great Depression lasted from 1929-1939 • The Great Depression was the greatest economic collapse in history. |
Recent Recession• The Great Recession according to National Bureau of Economic Research, began in December 2007- early 2008, but early events like the stock market crash of 2000 set the recession wheels in motion.
• The Federal Reserve lowered the interest rate to help with the economic slowdown created by the crash, banks gave out loans to individuals and companies that were not truly qualified to pay back their loans and the financial market was not properly being regulated. • Financial innovation + inadequate regulation = recipe for disaster. •Most modern day central banks have fiat currencies: the Fed can ‘create’ money artificially at the Federal Reserve. Fiat money's value is unrelated to the value of any physical quantity. •The country experienced deflation, high unemployment, and slow growth.•Americans remain unemployed with about 6.3 million out of work longer than six months. Another 11.3 million are working less than they would like – either working part-time or wanting a job but have stopped looking. • There has been a record number of home foreclosures. • The US unemployment rate was 7.0 percent in November, according to the U.S. Bureau of Labor Statistics on December 6th, 2013. • The key players were people and our recession was man made due to poor financial decisions and deregulations in the financial system. • According to National Bureau of Economic Research the recession ended in 2009, but people feel that it is still going on. • The Great Recession is the greatest economic downturn since the Great Depression. |