•

Roaring Twenties

Boom

– Materialism – Spending – Prosperous

Bust

• Great

Depression

– Stock Market Crash – Banks Fail – Fed took no action – Foreclosures – High Unemployment

Trickle Down vs. Pump Priming

“IT’S ON!!!”

Hoover vs. FDR Two approaches to the Great Depression.

Herbert Hoover •

Conservative approach.

•

Rugged Individualism.

•

Believes in the Business Cycle.

•

Philanthropist – charity work for those who need it.

Prosperity Business Cycle Prosperity Recession Recovery Trough

Hoover – Trickle Down



Give-A-Job campaign



Limited government hand-outs



Limited public works programs



R.F.C. Reconstruction Finance Corporation - Provided $2 Billion in aid to Banks, Insurance Companies Railroads, and other Big Businesses

Trickle Down Theory

R.F.C. – $2 Billion

Businesses Jobs People Spend Money Recovery

Roosevelt – New Deal

•

FDR’s Plan to provide relief to Americans.

•

The Brain Trust helps FDR develop the Alphabet Soup programs.

Keynesian Economics  Government must be involved in economy to keep it safe.

 To get out of Economic Depression, a government must spend money.



Deficit Spending

is needed.

John M. Keynes British Economist

“Pump Priming”

Recovery Business Expands People Spend Money $ $ $ Work Relief & Direct Relief Programs

What do we have today? Does this work?