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What factors contributed to the end of the Great Depression?
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6 Answers
The Great Depression didn't end at our house until about 1949.
Some argue that the New Deal might have made things worse, rather than better, but at minimum the programs lifted morale and provided useful make-work efforts in addition to some relief safety nets.
Recovery began with industrial activity in support of the war in Europe, even before the US' official entry into WWII, but certainly pickedg up steam in the '41-'45 period. There was a lot of diversion of manufacturing capacity to support the war, and considerable sacrifice by the civilian population as commodities were also diverted.
The post-war period was the real boom, with an explosion of entrepreneurial activity, the satisfaction of pent-up consumer demand for all kinds of goods (not least automobiles and housing), and the need to support European recovery.
There were several factors to ending the great depression but the key factors were:
1- FDR's new deal - The three R's = Relief, Recovery, Reform. Relief in the form of Social Security; Recovery in several forms including guaranteeing farmers a fair price for their produce and providing low interest rate loans at to help home owners repay their debts; Reform in the form tighter regulations on banking and the formation of the FDIC.
2- POST WWII - A lot of people confuse the economic recovery associated with WWII as being during the war, when the real recovery started at the end of the war. Yes, there were jobs in manufacturing (back in a time when the U.S. actually manufactured something) but as far as the well-being and growth-comfort of the American consumer was concerned, the time during the war was marked by deterioration, with Americans having to give up a lot of materials for 'the war effort'. It was only when the war ended that there was total economic recovery.
FDR's New Deal was actually the reason a recession turned into the Great Depression. It is very similar to what is occurring now via the housing market. FDR's poorly timed destruction of farm produce to increase prices was followed by the great dust bowl years of the 30's which set the country back even further.
The end of WWII brought about the end of the Great Depression which occurred because of the reduction in the size of government spending and the lowering of marginal tax rates.
With a free market, you will have recessions but not depressions. Unfortunately, the U.S. has not learned her lessons.
FDR's new deal came after the beginning of the depression, not before. Therefore it cannot be a triggering event. In every account that one can read, including conversations with my parents and grandparents, the New Deal was a direct influence for the positive. While it was not THE cure for the depression, it was certainly a HUGE positive.
@Mark
I did not say the New Deal triggered the Great Depression. Please re-read. The New Deal was the reason for the Great Depression lasting so long.
Here is a link to a paper written by the Mackinac Center titled "Great Myths of the Great Depression" http://www.box.net/shared/3sp72d8dss The New Deal was not a positive at all.
Hey John, I was responding to your actual statement that "FDR's New Deal was actually the reason a recession turned into the Great Depression." I substituted "turned into" with triggered, same difference. As far as a reason the depression lasted longer than it would have without it, I think a reasonable view would be that some New Deal policies helped, and some hurt...but the overall effect and impression of the people that were living in that time was a positive one.
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