American Economic Collaspe

Economic Collapse: Is It On the Horizon?  As the debt clock clicks, showing American debt growing, are we at risk for another Economic Collapse?

Changes In American Economy

The Roaring Twenties

As our military returned home from World War I, growth in American had already began and started changes that would affect finances globally, for decades. America usually relates growth as a good measure, however, the over night changes during the decade of the Roaring 20's sent the entire economic system into a downward spiral. It would take two decades, a new president and involvement in World War II to reestablish the American Economy.
Four major changes occurred during the American involvement of World War I, set in motion, the down fall of the American economy. These Four changes contributed considerably to driving the American Economy to the brink of Depression.

1. The shrinking agrarian Society: As boom towns were springing up, more young people and families that had for generations farmed, began seeking employment and living arrangements in cities. American farms began to fail. These abandoned mortgages effected banks across the United States.
2. Working society began employing masses of women, who had traditionally not been in the American work force. These women had for the first time in many of their lives, an excess of money. Women were for the first time, out numbered men in the work force for a short period. Skirts and hair cuts went short, and necklines plunged. America had entered a period of change. Any thing formally familiar, would be challenged.
3. The term Credit evolved. With reliable income sources, working women became a practical market. Prior to World War I, personal debt was not acceptable and avoided. Saving money to make purchases was the back bone of the American economy. With the new work force, came the idea generated by stores, businesses and banks that credit meant revenue. Anything could be bought on credit. From meals at restaurants, to dishes for home, as long as there was a willingness to pay, then anything could be bought. By 1925 nearly 1/2 of the American work force owed some form of personal debt.
4. Black Tuesday, October 24, 1929: Over night financial success stories began springing up. As people sought over night fortunes in the American Stock market. The unregulated market, was dependent on unregulated banks. Bankers exercised control over purchases. By using funds of customers not intended for investment on the stock market. Many purchases that failed. Losses of unimaginable amounts left pensioners, retirees, and those saving money in banks in total financial chaos. Brokers, were able to protect themselves, by demanding payment up front. If a stock began to dip, or falter, then a call to sale would be made, selling the stock at what ever price offered. But, where the stock made money or lost money, the only risk was on the bank and the investor. As more banks fell, more orders to sell pushed, for fear of a collapse. The market attempted to take counter measures. It was too late. A run on the banks began, investors pulling what they could salvage out of banks. If there was anything left to salvage. Quickly, within four days, the entire Stock Market collapsed. Setting off a chain of events that would leave Americans bankrupt and send shock waves globally.

President Hoover; 1928-1932

Hooverville

As Hoover took office in 1928, nearly a decade of uncontrolled banks and investments was plaguing the American economy. Only one year into his term, the stock market crash of Black Tuesday, October 24, 1929 happened. Plunging banks, families and businesses below poverty lines. As President Hoover offered little help to save homes, businesses and families going under, Hoovervilles of began to develop. Named after the President and his lack of effort to help, families held on to what they had, and found shelter where they could. Unemployment sky rocketed, homelessness was at an all time level, and the economy could not bounce back.

President Roosevelt and New Deals

Americans rallied behind President Roosevelt at his March 4th, 1933 Inaugural Speech. The promises of a New Deal, brought hope to Americans that had faced bitter poverty, mas unemployment and homelessness. There were actually Two New Deals, and both addressed the Three R's. Relief for the poor and unemployed. Recovery to a more level standard of economics. And Reform of the Banking Industry to prevent another depression.
The First New Deal: 1933-1934

1. Creation of the Emergency Banking Act and the 1933 Banking Act addressing the banking crisis.
2. The Federal Emergency Relief Administration provided $ 500,000,000 for relief operations in cities and towns.
3. The Civil Works Administration funded localities for make-work programs.
4. The 1933 Securities Act, to prevent another depression.

The Second New Deal: 1935-1938

1. The Wagner Act, to promote labor unions.
2. The Work Progressive Administration, relief through government projects.
3. The Social Security Act
4. Aide to tenant farmers and migrant workers.
5. The United States Housing Authority
6. The Farm Security Administration
7. The Fair Labor Act of 1938. Setting a minimum wage and hours for most workers.

Economics: Where We Are Today

As the Debt Clock rolls numbers, as of August 14th 2015 The United States of America owes a staggering: $ 18,151,220,988,961.42. But who does America owe this debt? Mostly to ourselves. But to other major investors too. Among them, China, Brazil, the United Kingdom, Japan, and the United States! That's right, the biggest chunk owed is to the citizens.