Great Depression
The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States. The timing of the Great Depression varied across nations; in most countries, it started in 1929 and lasted until the late 1930s. It was the longest, deepest, and most widespread depression of the 20th century. The impact of the Great Depression was devastating for both rich and poor countries alike, as unemployment rose to 25% and more than half of American banks closed their doors by 1933 due to bankruptcy or insolvency. In some countries, like Germany, poverty dramatically increased as hyperinflation destroyed people's savings while purchasing power plummeted, leading to extreme political unrest that culminated in World War II only five years later.
Despite its magnitude and severity, economists still debate what caused this massive financial downturn, which had such an immense effect on global history. Many believe it was a combination of factors, including banking policies, that led to over-speculation on stocks, along with other structural issues within economies around the world at that time, combined with several international events such as trade wars between nations resulting from high tariffs placed upon imported goods from abroad, reducing cross-border commerce drastically, and affecting all industries reliant upon foreign markets for survival. Another popular explanation is inadequate consumer demand, which can be attributed largely to income inequality leading up to the crash, making recovery difficult, if not impossible, without government intervention through programs like Social Security, which provides relief payments directly to households throughout America, helping them survive financially while increasing spending levels enough to allow businesses to remain afloat long enough until the economy recovers again nearly ten years after the initial collapse began.