The government created the great depression

2nd round is arguments only, so ill present my arguments and then in my next round try to defend my arguments and critique my opponents arguments. There are many contributions that caused the Great Depression, some of them involved the government, others didnt. All in all the Great Depression was caused or exacerbated by the following factors, - Deflation of commodity prices leading to a massive surplus of goods combined with overproduction of the same goods at the same time - Dramatic drops in demand and credit of both people, lenders, and banks - A disruption of trade between the states and overseas - Over investment by people in the rather new Stock Market - Rampant short selling by investors creating a volatile market - WWI debt reparations fell through - Widespread bank failures - Fear in the middle class leading to a breakdown in consumption - And most noticeably, the stock market crash of 1929 http://americanhistory.about.com... http://en.wikipedia.org... http://www.slideshare.net... - Deflation of goods due to overproduction along with under-consumption due to poor wages and fear The 1920's saw a revolutionary change in manufacturing as the process of Mass Production became widespread and factories began to exploit electricity. The Model T ford was the dream child of mass production, but throughout America in the 1920's all industries began to churn out more goods in the same amount of time than ever before, leading to a massive decrease in commodity prices. The only problem was that due to mass production a tremendous amount of wealth was unleashed, but not enough of it went into workers salaries so the workers still could not buy most of the goods being mass produced. "Between 1929 and 1932 the income of the average American family was reduced by 40%, from $2,300 to $1,500 http://kclibrary.lonestar.edu... Following the stock market crash there was an over abundance of goods but wages and earnings in the middle class was too low to have access to those goods. Salaries were low so families were very careful in where they spent money, so as consumption dropped to a new low goods that were being made were not being bought. This breakdown in consumption put a pause on capitalism itself, only worsening the economic effects and extending the longevity of the Great Depression as people resorted to hoarding what little money they had left. Meanwhile out in the Midwestern states where agriculture was how most people made their salary, Mass Production took its roots there too. New technologies allowed farmers to produce more goods than ever before on the same amount of land they had before. However more goods were produced they werent consumed any faster, sending prices falling. Production went up but prices sank too fast for any profit to be reaped by the farmers, meaning that farmers now were faced with two options to still maintain their salaries. They could continue to increase production at a massive rate or go broke. Many of them did both when the dust bowl started and farms that were profitable were literally turned into dust. The breakdown in agriculture severely worsened unemployment because now across the Midwest farmers were defaulting on home payments and any banks that were out there went belly-up when the bank runs were at their zenith and al credit was lost. http://www.thegreatdepressioncauses.com... - Bank Failures In the 1920's Banks were hell-bent on trying to make as much money as possible, like most banks today do. However back then banks did this through a combination of giving out tons of loans to new businesses and also by investing the money of their own clients into the stock market. When the Stock market crashed though billions that banks had secretly invested into it were lost, and the extensive loans given out started failing left and right. In the immediate aftermath of the crash though all was normal, but then in the 1930's it was learned that the banks lost a lot of people's money, and this caused panic and nationwide bank runs by people trying to find out if their banks still had their money, if any was left at all. Bad news was that often thee banks didnt have everyone's money, and as people came to get would they could banks began failing since they had no money to invest or loan out.... So unethical spending and investing of banks was a very large cause of the Great Depression as they lost close to $140 BILLION of people's money who on average only made $1,500 a year.... http://www.thegreatdepressioncauses.com... - Bad investments into the stock market by individuals The biggest blow to individual finances that were not caused by bank failures was losing it all in real estate investments or more commonly when the stock market crashed in 1929. When the stock market was first unleashed, people didnt use it to invest in the long term future for financial stability, instead people used it as a massive get-rich-quick tool where they would buy low and sell high, abusing short selling of stocks, margin buying, and investing on stocks that were doctored or fraudulent, etc. For a while though, people did get rich off of such risky investments, but when you make money off of something fast, you dont take the profit and run, you keep trying to profit over and over doing the same thing that worked before. Bad investing started a massive cycle that over time would build until it would burst, and in 1929 it did burst while everyone's money was still in the stock market, costing millions of people billions of dollars. http://www.angelfire.com... - WWI debts Following WWI European countries were in shambles, and their economies werent much better off. The US then in an act of good faith began to give loans to these countries to help them rebuild and it was assumed that over time these investments would be paid back. When these debts though werent paid back they coincided with the onslaught of the Great Depression because this caused a breakdown in trade because American banks no longer had the means to invest overseas like they did before while overseas banks no longer could repay what was owed. The Great Depression caused a breakdown in investing back into war-torn Europe which then caused a breakdown in international trade which thus made the effects of the Great Depression worse. http://www.angelfire.com... The government did play a hand in making the Depression worse, such as high tariffs which only hastened the breakdown in overseas trade, there were probably a few New Deal programs that didnt work as well as they should have, there were policies that also played a factor in how bad the Depression was too. The Great Depression though was caused by a combination of overproduction of goods, poor wages, bad investing by people and banks, the Dust bowl, and the Stock Market Crash in 1929