# What Did Cause The Great Depression/

**URL:** <https://boards.straightdope.com/t/what-did-cause-the-great-depression/624033>\
**Category:** Factual Questions\
**Created:** [June 4, 2012, 2:52pm UTC](https://boards.straightdope.com/t/what-did-cause-the-great-depression/624033 "2012-06-04T14:52:35Z")\
**Posts on this page:** 3\
**Page:** 2

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**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\
**Post date:** [June 5, 2012, 1:46pm UTC](https://boards.straightdope.com/t/what-did-cause-the-great-depression/624033/21 "2012-06-05T13:46:01Z")

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> [@Tom\_Tildrum](#):
>
> Not so. Federal [outlays](http://www.presidency.ucsb.edu/data/budget.php) nearly doubled under Hoover. Because revenue had cratered at the same time, this caused a spike in the deficit, to such a degree that FDR hammered Hoover in the 1932 [campaign](http://en.wikipedia.org/wiki/Franklin_D._Roosevelt#1932_presidential_election) for his free-spending ways, calling for “immediate and drastic reductions of all public expenditures.” (In looking at the chart, remember that budgets are forward-looking, and so the first year of a president’s administration will generally be under his predecessor’s budget).

> [@puddleglum](#):
>
> Your link is total government spending. If you change the scenario to federal government spending it goes from about 3.8 billion in 1928 to almost 6 billion in 1936, this is just in nominal terms, the actual increase was bigger due to the aforemention deflation.

First, by 1936, well into FDR’s recovery plan - spending only went up a little over50% in all that time?

Second, government was VERY small by today’s standards; so 50% more federal spending was not a lot of money compared to today.

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**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\
**Post date:** [June 5, 2012, 7:30pm UTC](https://boards.straightdope.com/t/what-did-cause-the-great-depression/624033/22 "2012-06-05T19:30:35Z")

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> [@Saint\_Cad](#):
>
> In a way some already has. Hoover started the Reconstruction Finance Corporation which gave money to the banks so that they could lend it out to average Americans. Thing was, there were no requirements for the banks to actually lend out the money so the banks kept the money and said thanks to the government. Obama’s bailout of the banks was eerily similar.

Interesting..the Great Depression coincided with the drying up of many areas of the mid-West-which was the cause of the Joad Family’s misery. What puzzled me about this was the fact that farmers were suffering from deflation (they owed money that they could not pay back. When the “Dust Bowl” happened, crop and cattle production dropped-one would have thought that this would have helped the remaining farmers (prices should have risen). But no, the US Government kept on restricting planting, destroying stored foodstuffs, etc.  
Deflation was the No. 1 problem in the Great Depression.

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**Author:** ![WarmNPrickly](https://avatars.discourse-cdn.com/v4/letter/w/d78d45/32.png) [@WarmNPrickly](https://boards.straightdope.com/u/WarmNPrickly)\
**Post date:** [June 6, 2012, 12:54am UTC](https://boards.straightdope.com/t/what-did-cause-the-great-depression/624033/23 "2012-06-06T00:54:11Z")

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> [@Saint\_Cad](#):
>
> Obama’s bailout of the banks was eerily similar.

I don’t remember this part of the Obama administration.

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