How does the Great Depression affect us now?
Try looking at the programs that made up Roosevelt’s ‘New Deal’. It was the first time major government agencies were set up to deal with social/economic problems. Our current welfare and social security systems date to that time. It was also the start of major public works projects being done by the federal government. Basically, major government involvement in peoples lives, and the large number of government agencies to handle that involvement, started as emergency measures to deal with the Depression. They’ve been with us ever since.
It effects us now in at lease two categories of ways. First, is that people believe that when the stock market and things are going well economically is high that we will come down rapidly as we did during the Great Depression. The other category is the philosophy and programs that got us out of the depression. People believe in deficit financing and pump priming meaning that instead of doing nothing to help the people who are loosing out in a depression the government should spend more money should in order to stimulate demand and thus provide jobs and incentives for business to expand. The government has insured bank deposits, increases the reserve ratios of banks, provides for unemployment insurance and social security.
