ࡱ> bRoot Entry A s.reaiBlxoiFanilez`8 FitoNrPyf\OFc21Table@; ;l}88H`Hq`~|x4,Ah<8"x4m>HF H(WordDocumentdxcxccxH`H`x~|4,A`?OMNPQRSTUVWXYZ[\]^`adfghijklmnopqrtvwxyz{|}~DocumentSummaryInformation8.InstarDllrevitnoCElorirtnaMacrosHm>Aa8;HPxHi>A}|x(A0||4|AVBA!8`|aN A U.inuqDevrNrmae|||A;ߋdir88HY=Aa88c848|"8H!=A8|Ah8!`|0TableL_ [4@4NormalCJOJPJQJmH <A@<Default Paragraph Font(U@( Hyperlink>*B*0+@0 Endnote TextCJ6*@6Endnote ReferenceH*8B@"8 Body Textd B*PJnH >C@2>Body Text Indent d(%*/@15g8aA5~AD   }D  aA !        $ i{ p$%,28>aA b? v$ $"$L'(*^-/3m9><>S>>>??9@<@@@^AbA!>" !wc!zY!i3!|D@!,!ys!~&!i3!F!~&!i3!<9!|D@!i3!F!ys!zY!!!!!!!!!!!!v$ $"$L'(*^-/operate without government intervention then the economic cycle will continue and boom times will be just around the corner. This school of thought was utilized in the beginning of the depression and allowed the crisis to deepen in severity as well as to spread around the globe. As the American stock market crashed many people in this country lost their life savings and were unable to repay their debts. This meant the lenders were bankrupt and could no longer extend credit to those in need. In turn, the consumer markets began to dry up. This eliminated many jobs because there was now a surplus of consumer items, so no new items were necessary. Also, the stock market crash led to a drastic decline in capital investment in industry. Without the necessary capital, many industries were forced to cut jobs or to close their doors. The Allied victory in World War I left the United States in a position of world leadership. With her late entry into the war, the United States did not suffer the human or economic loses of many other nations. The United States also benefited from the fact that all of the fighting occurred overseas. This left American industry and property untouched by the destruction of war. The result was that the American economy became the worlds strongest in the post-war period. This led foreign interests to look to the American economy as a lucrative investment opportunity. American capital was also used to fuel industry in many foreign markets. The United States was now firmly entrenched as the leading economic power in the world. Nearly all of the worlds industrialized nations, and many developing nations, were tied directly to the American economy. This led to catastrophic consequences when the stock market crashed in 1929. Within eight months of the crash, stock values had toppled to a mere twenty- percent of their pre-crash values. The collapse of the American economy rippled throughout the world, as nearly every industrialized nation was tied directly to the American economy. American investment in foreign nations came to an abrupt halt, leaving many industries without the capital necessary to continue full production and employment. In addition, many foreign investors had lost vast amounts of wealth in the stock market crash. In response to the deepening international crisis, most nations followed the traditional ideas of Adam Smith and laissez faire economics. Preferring to allow the market to run its course and to recover on its own. Herbert Hoover continued to utilize the policies that his presidential predecessors had utilized stating that the Republican Party has made an important contribution to progress in American and that is the resistance of the Republican Party to every attempt to inject the Government into business in competition with its citizens. Following the pervasive theories of the time, most countries believed that the appropriate government response was to cut spending. However, this did not have the desired effect of achieving a period of deflation, which would ideally improve the economic state of the world. Instead, this led to a further decline of consumer demand. As industries were struggling to find markets, many governments believed that the solution was to cut imports through dramatic increases of tariffs. This had the desired effect of severely cutting imports, but rather than being beneficial, it merely reduced the amount of markets for nearly all of the worlds nations. In fact, by 1932 the total value of international trade had fallen by more than half. With few international markets and little domestic consumer demand, industry toppled even further. As more and more industries began failing worldwide, banks were forced to raise repayment terms to point that businesses and individuals could not afford to borrow. This eliminated what little capital was available to industry and furthered the downward spiral of the international economy. In order to keep what little capital was available from leaving the country, many countries, including Germany, instituted exchange controls. This was a dramatic change from the theories of Adam Smith and the invisible hand. The German government, among others, began taking an active role in the economic affairs of its citizens. Although this allowed for a slight economic improvement, a rise of militarism and the increased production of munitions in Germany and Japan accompanied it. This method of economic recovery led to the aggressive foreign policies that would later drag the world into World War II. Several other countries, including Great Britain, took the initiative to devalue their national currency. This had the effect of causing the collapse of the gold standard. Many nations had used gold as the basis of their national currency. Under this system the government was required to have gold to back up the value of their currency. With the elimination of the gold standard, nations were able to increase the amount of money in circulation, therefore making it easier for residents to repay their debts. Inflationary policies, such as the elimination of the gold standard, represented a divergence from earlier theories as to the role of government in the economy, but policies such as this prevented runs on banks, therefore minimizing the damage of the depression in many nations. In fact, severity of the depression within countries can be linked to how long they held on to the gold standard. Although the abandonment of the gold standard proved to be beneficial to many nations, it further restricted international trade. Without the value of gold as a backdrop to a nations currency, it became more complicated to determine exchange rates between countries. So, although the elimination of the gold standard was advantageous for those countries that implemented this policy, it was a detriment for other countries of the world in that it further impaired the dwindling international market. As international unemployment figures reached 30 million, banks continued to fail at unprecedented rates, and people were struggling to survive, governments of the world began to realize that they had no choice other than to take a more active role in the economy. Countries such as Germany, Japan, Italy, and the Soviet Union created government-run production programs that were largely militarist in nature. Although these policies would cause other problems, they were effective in reducing unemployment and pumping capital into the economy. Other countries, such as Great Britain and the United States, reacted by creating a welfare state. The election of Franklin Roosevelt in 1932 signified the divergence from traditional economic policies within the United States. Roosevelt interpreted his election as a mandate for government action, stating in his inaugural address, This Nation asks for action, and action now . . . Our greatest primary task is to put people to work . . . It can be accomplished in part by direct recruiting by the Government itself. Roosevelt came into office with unprecedented support, both from congress and from the public. Ralph Raico described the feeling many Americans had towards Roosevelt, In 1933 the pain of empty bellies and empty pocketbooks had the people on their knees, and Roosevelt gave them what they wanted to hear. This unprecedented support allowed Roosevelt more leeway than most American presidents have enjoyed. As Roosevelt began to confront the emergency faced by the nation, he recognized that extraordinary times require extraordinary measures. The extraordinary measures that Roosevelt felt necessary to pull the United States out of the Great Depression included the expansion of the powers of the federal government. Roosevelt believed that a stronger federal government would be able to play a stronger role in ensuring the prosperity of the American economy. Roosevelt proposed 15 measures to confront the economic crisis. These measures were collectively known as the New Deal. The support received by Roosevelt allowed him to get all fifteen of his New Deal programs passed within his first 100 days in office. Roosevelts New Deal programs accomplished their goals of providing relief to American citizens who were desperately in need, helping industry to recover from the economic crisis, and reforming the nations economic system in order to prevent future depressions of this magnitude. However, in accomplishing these goals, the Roosevelt administration greatly increased the function of the federal in terms of its role in the welfare of American citizens. Roosevelt himself realized this change was taking place, he stated that his New Deal program involved a changed concept of the duty and responsibility of government toward economic life. The most dramatic challenge to the existing system of laissez-faire economics involved the passage of the National Recovery Act (NRA) on June 16, 1933. The NRA was designed To encourage national industrial recovery, to foster fair competition, and to provide for the construction of certain useful public works, and for other purposes. This represented a change in the scope of the federal government in that this act basically required the involvement of the federal government in every sector of the economy. The NRA established pricing and production regulations for industry as well as requiring retail stores to display a blue eagle to ensure customers that all of the store's products met NRA regulations. Although this act would be ruled unconstitutional in May 1935, it demonstrated that Roosevelt was willing to push the powers of the government to nearly any length in order to promote the recovery of the nation. During his time in office, Roosevelt expanded the role of the government in the finances of individual Americans. Roosevelt is often credited with establishing the United States as a welfare state. This began on August 14, 1935 when the Social Security Act was signed into law. This legislation created a system of old-age benefits for workers, benefits for victims of industrial accidents, unemployment insurance, aid for dependent mothers, and children, the blind, and the physically handicapped. The Social Security Act established the precedent of the American government assuming a level of responsibility for the social and economic welfare of its citizens. Roosevelts interpretation of the welfare state was limited in comparison with the governments involvement in individual welfare today. However, it was Roosevelt who set this precedent in the United States, despite a continuing controversy over whether the government should be involved in such affairs. Larry Elder elaborated on this point, despite a depression and 25 percent unemployment, the Constitution, under the vision of limited government established by the Framers, did not permit this kind of income redistribution, no matter how popular or desirable. This is an argument that has grown through the years as the welfare state has grown within the United States. The government has become increasingly involved in the welfare of its citizens and this began with Franklin Roosevelts message to Congress in 1935. The initial reaction of the United States government to the economic crisis that would come to be known as the Great Depression was similar to the reactions of most of the worlds nations. This reaction was detrimental in the sense that it not only did not provide the support individuals and businesses craved, but also led to a further downward trend in nearly every economic indicator. The governments of the world continued to follow the traditional school of thought that the government should stay out of economic affairs because market mechanisms would eventually balance things out and prosperity would return. As the situation worsened for individuals and businesses, people all around the world began calling for action from their governments. One by one, many governments began to heed the calling of their citizens and take an active role in their nations economic affairs. In nearly every case, as the government became more active the economy improved. Although the world did not completely recover from the Great Depression until the onset of World War II, conditions improved dramatically for most people as their governments recognized the necessity of action.  Rugged individualism speech  FDR Inaugural speech  Ralph Raico, "FDR - The Man, the Leader, the Legacy, Part 9," Freedom Daily, (April 2000) (August 10, 2004).  Richard M. Ebeling, Monetary Central Planning and the State, Part 13: FDR's New Deal, Freedom Daily, January 1998, (August 10, 2004).  "Transcript of the National Recovery Act (1933)," Our Documents (August 10, 2004).  "Social Security Act, 1935," Our Documents, (August 12, 2004).  Larry Elder, "Constitution vs. Modern Welfare State," WorldNetDaily, July 6, 2001 (August 12, 2004). 3m9bA8BB8CEDDUnknown North HighaAY)^)>[>`>>>3?8?@@bAgk=!">@@@@8A@AbA North High.Macintosh HD:Data Files:Great Depression Paper@>>>>C$Eƀb'pi0 1 "  h9tx9PqD   ,L#J"N"p#q##%I%J%V%W%e%{&&&l,s,..355m9":1:>>_A`AaA1@10 @1X1r1 @10@1ތ1N @10&@11.@0N14"@0 2@12@1P13@111Z5@116@1<1l1f7@1161:1@1B1H07@1܏11111F10H?@1C@1~0D@10jJ@10L@11RP@1111P@1R@100R@1L0^@10vc@1l@10p@1hx@11y@00@0@0.@00@GTimes New Roman5Symbol3 Arial3Times"qhfO #3 m $>0d>@Are You suprised ? 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Birthday BirthdayLSK North High N"%'"*,/02W6Q84<@@ AAASBTBBBmCnCDDD nt/&H00000000 Name="Project" HelpContextID="0" CMG="F0F231B735B735B735B735" DPB="E0E221A222A222A2" GC="D0D211921292126D" [Host Extender Info] &H00000001={3832D640-CF90-11CF-8E43-00A0C911005A};VBE;&H00000000 [Workspace] ThisDocument=0, 0, 0, 0, C jy }qU`J1kmBĆ%B*yu6ʋQlUz|ib+{ FMicrosoft Word DocumentNB6WWord.Document.8 M@"?a|)Х!CJZճ#iMMd2 ՜.+,D՜.+,T hp  'Omaha Public Schoolsedm?: Are You suprised ? Title 6> _PID_GUID'AN{C585C913-F966-11D9-92E2-00306508BC9B}
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SaveFormatwdFormatDocumentwdFormatTemplateeSavedd DeleteLines AddFromStringDialogsʊwdDialogFileSummaryInfoTitle~SubjectPRAuthorCategory\KeywordsTComments)ÀExecuteYSaveВ Document_NewE; SelectionZFontUSize ColorIndexӀwdGreenb Animation盀wdAnimationSparkleText؀ InsertAfter5qMoveDowǹUnitwdScreenCountv0wdAutoVKwdAnimationNone0z Document_Open`   LMG7ID="{C585C91A-F966-11D9-92E2-00306508BC9B}" Document=ThisDocume!!123456789:EX)i 3 ;R"$u'Q*-039I>J>????@@@@YAZAAAoBpBCCCԞBBPԞCEPDDUnknown North HighCX\))<<I>J>>>@"@@@@@BBCen=jCH@P!j"I>J>>>???@AAJBPBBBC North High.Macintosh HD:Data Files:Great Depression Paper@<<<<yGCJOJPJQJmH FGCJOJPJQJmH C$Eƀb' d6d 123X.()Fiyhi~ 7N]l  - 7 Q T U ij0;<= :;,9UcdTkf\`"$678Ww>Q!!!u"y"##[$^$M%s%t%%%%&&&T'c'p'q'**h+m+=,K,,,/"/11355889Q:`:<<<<H>I>J>X>f>l>w>}>>>>>>>>>>>>>>>?????/?0?B?C?D?E????????????@@@@@@@@@@IAXAAAAA_BeBThisDocument u _VBA_PROJECTv8PROJECTDCompObjX The 1920s are often characterized as an age of unbridled spending and extravagance. The American economy was booming and many Americans took every opportunity to flaunt their newly found wealth. Many Americans believed that the economy would continue to prosper forever and that the United States would soar above all of its international counterparts in terms of wealth and prestige. These feelings of American economic invincibility came to a crashing end in late 1929. Beginning with the stock market crash of 1929, the American economy experienced an unprecedented downturn known as the Great Depression. Nearly every economic indicator was at or near record lows, including unemployment rates, income levels, and other market indicators. During this longest and most severe economic depression in American history, nearly one-fourth of all Americans were unemployed and many more were under-employed. This shortage of employment led to the national income being cut in half. Perhaps even more important than any economic indicator was the effect the depression had on the American people. Many people began to fear that the American economy was not sound and that the American government was unable to cope with the problems the country was facing. This sentiment was echoed around the world as the depression spread in epic proportions. As we look back upon the hardships faced by millions of people all around the world, it becomes apparent that these beleaguered people shared an outlook that is often echoed today. The American government, as well as many other governments, contributed to the severity of the depression, not only within their own countries, but also to the spread of this economic downturn around the globe. Governments around the globe utilized the same economic policies they had been following for years, but a depression of this severity required a different outlook and a new set of economic theories. Although many nations would adjust and develop new strategies to rescue their economies, they were often slow to react. This left millions of people suffering as their governments clung to antiquated ideas. The traditional school of thought had always been that a governments role in times of economic crisis was to simply allow the crisis to run its course. This school of thought was based upon Adam Smiths theory that each individuals pursuit of wealth will benefit society as a whole. Smith argued that market forces would employ an invisible hand to guide the economy to prosperity. Smiths theory seemed to fit the economy of the 1920s. The Republican presidents of the United States had utilized this theory throughout the decade and the result had been one of the most prosperous decades in American history. This left the governments of the world with little to no role in the economic well being of their citizens. Instead, they believed that the economy is cyclical and will always undergo periods of boom and periods of depression and if the governments of the world allow the market mechanisms to ./++r,,,,22c344W6N8O8.;/;@@@@ A AAKAXAAAAAA BSBTBUBBBBBC CnCoCCCD\8VX6: .dj*Ԟ66B*j0JB*UB* j0JUCm N"%'"*,/02W6Q84<@@ AAASBTBBBddlBC CCCCCC1@0000`0b0d0121<0L0N1@11 @0 @1 @1P11 @01@11@1җ1 1@1V@101@10@1@1N1<@1V1@1X11d@11D@111@1ތ1N @11 @1Ҙ1!@10&@1Ԙ1h'@1ژ1(@1ܘ11)@1)@10*@11.@11.@1 10@1 11@11@0N14"@0 2@12@1P11(3@14@1,4@11@11B1D1Z5@116@1<1l1f7@11F1Ď161:1@1B1H17@1T18@1X0::@1b1=@1܏11111F11 0H?@1j1@@1C@1~0D@1|11tI@10jJ@11L@104N@11RP@1111P@1R@101R@1ƙ1"T@100d? @Are You suprised ? Birthday BirthdayLSK North Highnt/&H00000000 Name="Project" HelpContextID="0" CMG="F0F231B735B735B735B735" DPB="E0E221A222A222A2" GC="D0D211921292126D" [Host Extender Info] &H00000001={3832D640-CF90-11CF-8E43-00A0C911005A};VBE;&H00000000 [Workspace] ThisDocument=0, 0, 0, 0, C jy }qU`J1kmBĆ%B*yu6ʋQlUz|ib+{ FMicrosoft Word DocumentNB6WWord.Document.8 M@"?a|)Х!CJZճ#iMMd2 ՜.+,D՜.+,T hp  'Omaha Public Schoolsedm?: Are You suprised ? Title 6> _PID_GUID'AN{C585C913-F966-11D9-92E2-00306508BC9B}