Business
The Great Depression Explained
Discover the Great Depression, the severe worldwide economic downturn of the 1930s. Learn its causes, impact on society, and lasting legacy.
What is it?
The Great Depression was the most severe economic depression in the history of the industrialized world. It began after the stock market crash of October 1929, known as Black Tuesday, which sent Wall Street into a panic and wiped out millions of investors. Over the next several years, consumer spending and investment dropped, causing steep declines in industrial output and rising levels of unemployment as failing companies laid off workers. By 1933, when the Great Depression reached its lowest point, some 15 million Americans were unemployed and nearly half the country's banks had failed.
Why is it trending?
The Great Depression remains a crucial reference point during any period of economic uncertainty. It is often studied when modern economies face recessions, market volatility, or debates over government intervention. Its lessons on financial regulation, social safety nets, and the psychological impact of economic hardship are perpetually relevant. Comparisons are frequently drawn between its scale and other major downturns, like the 2008 financial crisis, making it a timeless topic for understanding economic cycles and policy responses.
How does it affect people?
The Depression had a devastating effect, leading to widespread unemployment, poverty, and homelessness. Millions lost their life savings as banks collapsed. The crisis prompted a massive government response, most notably President Franklin D. Roosevelt's New Deal. This series of programs, reforms, and regulations fundamentally changed the role of the U.S. government, introducing social safety nets like Social Security and unemployment insurance. Its legacy continues to shape modern economic policy and debates about the government's responsibility to its citizens during financial crises.