The Great Depression was caused by a failure of the free market and was resolved by government intervention. MYTH

The free market fell because the government intervened too much. When the government intervened to help fix the problems it created even bigger problems. In the free market was affected when the taxes and interest rates went down so many went in to debt and then the rates and taxes went up causing the people not to have money. The stock market was running on borrowed money and the interest going up so no one could borrow money. So people went selling stocks and the price continually dropping. The government was also getting rid of the gold standard so the worth of the dollar had decreased so much and so the cost of everything cost so much.

The employment rate was so low the government had created jobs for people across the country, which helped slightly. The government had underestimated the impact of playing with the free market would do to the economy. The jobs the government provided were jobs that were paid for by charities because poor Hoover did not want to use government money to help the people got on their feet.

Another poor decision that the government made was to make bank units because when one of the banks in the unit went bankrupt so do the others. This bank failure had cast citizens their life savings because no insurance was on the money of the people and because the banks had loaned all the money and were not repaid the went under.