Lessons from the Great Depression, Essay Example

One of the reasons the Great Depression got worse was lack of response from the U.S. Government in the beginning as President Hoover had strong confidence in the markets to recover from the crisis. It was only under President Franklin Roosevelt’s Administration that the government started intervening in the economy to help the nation recover from the Great Depression. President’s Roosevelt’s Administration increased government oversight of the economy by creating agencies such as SEC and increased government spending to stimulate economy and create jobs. Thus, the lessons from the Great Depression as well as certain other measures will ensure now that an event like the Great Depression doesn’t occur anymore.

First of all, the U.S. Government will immediately respond to any crisis instead of putting confidence in the markets to recover from imbalances. In fact, the U.S. Government response during the recent financial crisis was also due to lessons from the Great Depression. The U.S. Government also has agencies that actively monitor the economic health and take measures when necessary such as Fed and SEC. SEC makes sure that the companies are more honest in their financial reporting and market conduct and the Fed stands ready to take measures such as lowering interest rate that would encourage borrowing and spending by both businesses and individuals. Similarly, the U.S. Government will also stand ready to make sure the public confidence is not lost in the financial system even if it means bailing out huge corporations and banks. The Great Depression also occurred due to bank runs but now such risk is low due to FDIC insurance for all depositors. These measures may not prevent another crisis as the recent financial crisis shows but these measures will at least help the nation prevent another crisis as severe as the Great Depression.