V.Great Depression through World War II (1929 – 1945)

Date: 2015-10-07; view: 439.

The two most influential economic events of the twentieth century in America are the Great Depression and World War II. While the precise causes of the Great Depression are both numerous and challenging to pinpoint, the economic effects were disastrous. At its peak, unemployment was nearly 25 percent of the workforce as hundreds of banks failed (about 40 percent) and hundreds of millions of deposits were lost. In summary, after “increasingly stock speculation, the stock market crash of 1929 wiped out millions of investors and crippled confidence among business executives and consumers”.

Under the watch of President Franklin Delano Roosevelt, America launched a vast economic stimulus program called the “New Deal.” The program was designed to rebuild the confidence lost during the Depression and put people back to work through government-sponsored works projects. The New Deal vastly expanded the role of the federal government in the American economy.

A close relationship between the private sector of the economy and the American government was developed as a result of the Great Depression. That relationship would continue into World War II, when the nation's industrial sector was mobilized and coordinated by the government to contribute products directly to the war effort. The gross national product (GNP) of the United States increased over 50 percent between 1941 and 1945 and unemployment hit its lowest point ever at 1.2 percent. America, meanwhile, was becoming increasingly urban as populations shifted to cities and agriculture became more mechanized and absorbed by big business as a result of wartime technology.