2 Answers | Add Yours
The greatest and longest-lasting impact of the Great Depression was that it remade the relationship between people and the government.
Before the Depression, there was very little expectation that the government would take care of people or ensure the prosperity of the economy. The government was supposed to more or less stay out of people’s lives. With the Depression, that changed permanently (so far, at least).
Today, we expect that the government will take care of us in many ways. We have come to rely on Social Security, which was created during the New Deal. We have come to expect things like government spending to get the economy out of recessions (another thing that started with the Depression).
This is by far the most consequential impact of the Depression on the US as a whole (outside of the ways in which individual people were hurt by the Depression).
In my opinion, the greatest effect of the Great Depression on the United States was the change in attitude it brought regarding the role of the federal government. For much of our history, and especially during the 1920s, many Americans believed the federal government should have a hands-off policy toward our economy and other aspects of life. When the Great Depression occurred, people began to look to the federal government for help.
The belief that the federal government should be a safety net during very difficult times was a significant change in our attitude. All of the job creation programs of the New Deal reflected this belief. The New Deal laws passed to regulate the banking industry and the stock market showed this shifting view. The creation of the Social Security program is further evidence of this new attitude.
This view can also be seen today. During the Great Recession of 2008-2009, people looked to the government to help ease the crisis. The government helped many companies avoid bankruptcy by providing relief to them. The Federal Reserve Board lowered interest rates to near zero to increase investment in the economy and to help homeowners refinance their mortgages. When a natural disaster strikes, people also look to the government for help.
This shift in attitude regarding the role of our government during difficult times is the most important effect of the Great Depression on the United States in my opinion.
We’ve answered 319,827 questions. We can answer yours, too.Ask a question