Dr. Martin Hash Podcast

The Great Depression lasted almost a decade in the 1930s. It seems a long time ago now, and has little relevance except that it was the largest of a long string of economic downturns that have periodically punctured the ever-increasing financial bubble that is the American economy, and for that reason it is endlessly invoked, analyzed, and debated. The most contentious issue is how it ended? There are several explanations; from president Roosevelt's New Deal and government spending on WW2, to the claim that government intervention in the Free Markets caused it, kept it going, and it burned out naturally due to a new economic cycle starting. The reason a dispute exists is because it embodies the arguments for and against stimulus spending; liberal versus conservative economic theory.

First, The Depression ended in 1941 because America was at full capacity almost immediately after entering the war, so everyone had a job, and government borrowing was paying their wages. This was soon followed by the G.I. Bill which allowed lots of people to buy houses, and soldiers to go to college, again government printing money. The worldwide depression ended because lots of people died, and the stuff they used to have was distributed to other people, making them richer, and there was a huge pent-up demand because of the deprivations of the war. The Great Depression ended because of dramatically increased consumption, and increased production to match; which is always the ending whatever the reason.