Economic policies and how they led to the great Depression

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The Great Depression in 1929 and the Great Recession in 2008 were great periods of economic turmoil in the United States. They are periods that occurred as a result of the use of certain economic policies that led to significant economic problems for the country and other nations of the world. They were both characterized by sluggish economic growth and a reduction of economic activities, leading to unemployment, and other economic problems (Crawford, 1).
The first cause of the depression was a stock market crash that led to corporations and banks crashing and going into bankruptcy across the nation. Stockholders had lost close to forty billion dollars. More than nine thousand banks failed. At the time bank deposits were not well insured, and many people lost their savings. Other banks stopped creating loans. These are factors that caused a significant level of under consumption meaning that companies could not operate. The disruption in trade caused widespread unemployment and great level impoverishment. The case above shows economic policies of limited government intervention on matters of business in the country. The lack of more security and regulation led to the crash (Crawford, 2).
The Great Depression can be compared with the Great Recession by the fact that the stock market also crashed. It was caused by the collapse of the real estate market and was perpetuated by the sale of unsecured loans for housing. It occurred as a result…