Which Is The Worst Crisis Of The Usa: The Current Crisis Or The Great Depression Of 1930?

Which is the worst crisis of the USA: The current crisis or the Great Depression of 1930?

In 2007 a severe financial crisis started in the U. S., and didn’t show any recovery until more than 12 months later, this takes to establish a comparison with the other crisis in this country, the Great Depression back in 1929. My thesis is that so far, the current crisis has cost higher loses around theworld, than the Great Depression. To prove this, several facts will be considered.

The Great Depression
The Great Depression was a worldwide economic crisis that started around September 4, 1929 and will be known around the world on October 29, 1929, also called the Black Tuesday, with the crash of the US stock market. Every country was somehow affected by this crisis. The timing of itsbeginning was different around the world but in most countries it started in 1929 lasting until early 1940s and in some countries, such as Germany, until World War II. (1)This crisis had devastating effects, for example: unemployment around the world grew in 1932 from 25% to 30% (2).

Causes:
There were a lot of causes for the first crash (1929), which include structural weaknesses and other eventsthat made this depression worse. In this essay will be studied two theories, theories that will be classified into two points of view: the Keynesian theories and the Monetarists theories.
The Keynesian point of view states that a depression is an especially severe recession in which people keep the money instead of giving it, instead of spending it. The big problem with this crisis started whenthe Federal Reserve tighted the money supply too much, starting a monetary contraction. And, reviewing what Keynes believed, this crisis became a depression when people, after the market crashed, started saving the money instead of spending it because they were afraid of losing it. (3)
On the other hand Monetarists’ represented by Milton Friedman, Ben Bernanke and others that think it could havebeen just another recession, if the Federal Reserve had provided some emergency lending to the banks some others financial helps.(1)
There are various heterodox theories that reject the explanations of the Keynesians and the Monetarists, but these two explanations are the most discussed and accepted.

Effects
Latin-American and Asia
Impacts of the Great Depression were softer in LatinAmerican and Asia than in the US and in Europe, however it also had effects. In Latin America the crisis damaged economies of countries like Brazil, Peru, Bolivia, etc. An Example of effect is that Brazil had to start with the industrialization process because of the devaluation of coffee. (4) Another Country that was affected as Chile. Chile´s GDP dropped 14%, mining income declined 27%, and exportearnings fell 28 %. (1) Asia wasn’t so affected but it also had consequences. For example in Japan, the economy shrank 8% during the period of 1929-31. (8)

Europe:
Europe was deeply affected by the crisis. Germany got a high level of unemployment, it was near the 30% in 1932 and this depression led the country to a political extremism and in 1933 Hitler’s Nazi Party was born. The UnitedKingdom was one of the most affected countries around the world. By the end of 1930 unemployment reached levels of 20%, and exports fell by 50%. In some towns and cities in the north east, unemployment reached as high as 70% as ship production fell 90%. (1)

USA:
In 1933 the unemployment level got to 25% from 3,2%, leaving more than 15 million Americans out of work. In the time between 1932and 1933, the banking system almost entirely collapsed. More than 5,000 banks failed, these banks had the savings of people, savings that were completely lost. Incomes dropped 53%, this led to a poor consume and demand of products, a fact that will make hundreds of factories and mills close and therefore almost half of the manufacturing plants failed. (5)(7) On October 29, 1929, 16,400,000...