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Could we have avoided the great depression? How?

  1. Could we have avoided the great depression? How?
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Answer #1

Yes. The government should have removed all obstacles to trade with foreign nations which would have stimulated the world wide economy after world war 1. Instead, the raised protectionist tariffs that effectively stifled trade at a time when Europe, which had been devastated by the war, could have efficiently rebuild. Secondly, the government could have, as previously stated, curbed abusive investment practices which were defrauding small investors and also causing huge swings of capital to enter and exit the market over a short time, causing market instability , and actually triggering the crashed the course the depression. Finally, had the victors in World war 1 not destroyed the German economy through the versailles Treaty. perhaps all of Europe wouldn't have fallen after the market crash in the US. The federal government, doing what it shouldn't have, and not doing what it should have, transformed a moderate economic problem into a disaster.

People were taking out bank loans to buy shares. As the shares rose, the buyer would sell them, pay the bank back with interest and keep the remainder. it got way out of hand as the shares were over valued. In October 1929 the Wall Street crash occurred leaving shares practically worthless and people couldn't off load them and banks wanted their loans back. Many businesses and individuals went bankrupt. So much for the roaring twenties.

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