The Great Depression Essay Example | Topics and Well Written Essays - 500 words - 3

The Great Depression - Essay Example As the research declares most farmers and companies hence began to incur losses and default on their loans. The situation got worse after some parts of the nation were hit by a terrible drought. America was also operating on a laissez-faire economic policy that did not impose any regulations on businesses. Most companies paid low wages to their workers leading to uneven wealth distribution. The above factors coupled with the fact that Europe was also going through the depression led to an increased decline in the market for American products. It led to the closure of businesses, increase in debts, massive unemployment, and foreclosure of banks. The final blow resulted from the collapse of the New York stock market that led to the loss of billions of dollars of investor money. As the report stresses President Hoover tried to end the economic crisis by encouraging cooperation between government and business, establishing government agencies, fostering labor harmony and attempting to balance the budget. He refused to involve the federal government in manipulating the currency, fixing prices or controlling businesses. He also refused to use federal money to give direct aid citizens hence operated on the principle of rugged individualism. President Franklin Roosevelt, on the other hand, held a much more liberal philosophy as he believed the federal government was required to step in and give direct aid to its people.