The Response to the Economic Collapse. HOT ROC: What are the similarities between the economic decline of 1929 and 2008? 1929 2008 Heavy borrowing

The Response to the Economic Collapse

HOT ROC: What are the similarities between the economic decline of 1929 and 2008?

1929 2008

Heavy borrowing Corruption Unrealistic buying stocks

on margin and goods on credit

Falling real-estate prices Vastly overvalued stocks Bailout by GM’s Durant,

Rockefeller, Lamont Emergency spending

programs: New Deal

Heavy Borrowing Corruption Risky investments by stock

broker companies Plummeting real-estate prices Vastly overvalued stocks Bailout by government,

Buffett Emergency spending

programs: American Reinvestment and Recovery Act

HOT ROC: What are the differences between the economic decline of 1929 and 2008?

1929 2008

Government’s involvement in the economy: 3%

Governments did little to directly intervene

Massive bank failures: 40-50%

Unemployment: 25% *Add to glossary

Government’s involvement in the economy: 20%

Governments all over the world rushed to prevent a total meltdown

Few bank failures: 0.6%

Unemployment: 9%

New Vocab: Which approach do you think is best for the economy?

Supply Side Economics The theory that economic growth depends on

increasing the supply of goods and services through tax cuts; also known as trickle down economics

Demand Side Economics The theory that economic growth comes from

government spending and regulation of the economy; also known as Keynesian economics

FDR Launches the New Deal’s First Hundred Days Read over page 398 What 2 programs do you think could most

help the US in 1933? What 2 programs do you think could help the

least? Why?

News broadcasts You will be working to develop a news

broadcast in a group of 3-4 that will teach the class about the impact of the Depression on a particular group.

Homework: Read the assigned section for your news broadcast group.

Performances will be on Friday.

Review http://

www.youtube.com/watch?v=Wil1ePlT1xs&feature=related

Homework Study Vocab Do Makeup Work, due December 9th