The Great Depression, Lesson 7

The United States of America is a great power in the world and has been since its creation.  Even great nations can misstep.  The Great Depression is one of the biggest failures of the people and government in the United States.  The Great Depression was in fact a failure of the free market but was in no way helped by the interference of the government.  When the Depression happened it was assisted in further crashing by the interference of the government.  While there were surely ways the government could have helped the economy, the way the government went about “helping” was not a very helpful way.

                The government’s increasing involvement was a big reason to why the economy took so long to recover.  For example, President Roosevelt imposed so many takes hikes on the people and businesses they had very little money to put into hiring new employees.  Roosevelt was greatly in favor of tax hikes and in 1934 the government had implemented tax rates up to 90% on the top income bracket.  While the government may have needed money to keep funding their many groups, they would never have needed those groups if the people hadn’t been out of work.  The U.S. people were in so much need of money and yet the government still continued to raise taxes.  By imposing all of these taxes on the people the government was majorly interfering.

It is government interference like that that led to an even greater plunge in the U.S. economy.  While some forms of interference is needed to help the economy recover, not all of them are helpful.  In the majority of cases the economy could rebound by its self and recover just fine.  In class we discussed how the great depression was preceded by large amounts of government interference.  This could be a huge reason as to why the Great Depression ended up being as bad as it was.  The economy does go through periods of rise and fall.  This was the first time that there was major government interference which could be a huge reason to why the economy plunged so far.  The free market had fallen by its self but the government interference was a contributing factor to why the economy fell so much farther. 

Charter City, Lesson Six

Every city, state, nation, and even the world have a constantly running economy.  Every day there is money and man power being poured in to keep the economy, on any level, running.  While every country has their own way of how their economy operates; there are certain principles that keep the more successful ones running smoothly.  Despite the fact that some do run more smoothly than other, there are still things all of them could to do improve.  The most important ones that any economy should learn to perfect would be property rights, Free trade and limited government involvement. 

            Property rights are extremely important because everyone should have the right to keep and do what they please with the things they produce or make.  Everyone should have the right to keep the things that they produce.  If someone owns a horse then they have the right to sell or keep their horse.  If they want they could buy another one and breed them.  If they choose to do that then they also own any offspring that come from their horses.  This is a very important aspect to an economy because without it there would be no drive for entrepreneurs.  By having the right to keep the things that they produce people will be more willing to create more new things.  This helps expand the economy and build up the amount of products that can be bought, sold, or traded. 

            Free trade is imperative in a country with numerous states.  This is because having trade restrictions in a single nation can add up to a lot of unnecessarily money for companies.  It also makes it easier and cheaper for the citizens of your country to buy and sell things to each other across state lines. 

Limited Government involvement is also a huge part of keeping an economy on the right road.  As we discussed in class, countries that are run under a strict dictator can fall behind economically.  This is usually because the government takes any industry that becomes successful and makes it government owned.  If you work in fear of the government pulling all of your hard work out from under you there is no motivation.  There would be no incentive to work harder and build up your industry.  By limiting government involvement in certain areas of the economy you can allow citizens the opportunity to help build up the economy in their own ways. 

    The economy is obviously a crucial part to any country.  By building it up and expanding it you can grow your country in a similar way.  There are certain things that are necessary to observe if you want your country to have a successful economy.  The citizens must be allowed property rights, free trade between states, and the government must only be involved in a limited manner.  If your country goes about building up their economy in a manner that is beneficial to both government and citizen it is much more likely that it will succeed.