Why Was The American Economy Dbq

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Throughout the many years of the Great Depression, the American economy plummeted greatly because of ongoing issues throughout the United States. The American market, and essentially continuously buying, are what keeps an economy in any country moving. The points at issue which allowed the economy to go down consist of three major factors. All three of these aspects took a great amount of citizens down along with all of their profits. Families, businesses, and employees struggled to stay standing during this time period. The American economy suffered this vast plunge because speculation in the stock market, maldistribution of income, and overproduction of goods. For the duration of this time period, the purchasing of stocks became very popular, …show more content…

People bought stocks with the speculation of benefit to optimistically help support their families, as well as being able to have all home necessities. The fight for a small profit at the least was strong and intense because of the little amount of money there was to spread between businesses and citizens. Americans began to overextend their budgets and purchased more stocks at higher prices than what they were actually worth. William E. Leuchtenburg stated in The Perils of Prosperity that, “With debt no longer being shameful .....consumers bought goods on installment at a rate faster than their income was expanding” (Doc 6). This quote exemplifies how America’s debt was no longer an embarrassment and people bought without concern for consequences. With a mindset such as this, it was inevitable that the day would come when the economy would face these repercussions of speculation. On October 29, …show more content…

Although, for wealthy people it was not much of an issue. For poorer people, the challenge became harder and harder everyday with the hope of being able to do simple tasks such as putting food on the table for their families. These people sold off their equity for a fraction of its actual value in an effort to have enough money to get by on a daily basis. However, the wealthy did not have to worry to the point of liquidating their values, therefore enjoying a much larger piece of the stock market. In Frederick Lewis Allen’s data, The Big Change, it breaks down the percentages of annual American family incomes. In Allen’s chart, he illustrates how only 2% of the American population makes over $10,000 a year. With the poverty level at $2000 a year, most of the American population fell close to or under this annual income (Doc 8). These low wages of annual income made people's’ lives a true struggle. Citizens would work for nearly 24 hours, all week long, just to get by with basic living standards. An example of living at or below the poverty level, is documented in Paul Blanshard’s “How to live on Forty-six Cents a Day” interview with a woman living in South Carolina with her family of 6. One of the most shocking points of the interview is where the woman explains how between her and her husband, $22.80 is made per week. She goes on to describe, “It takes about $16 a week to feed us” (Doc 7). This woman’s

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