Topic > Analysis of Austerity - 922

Hoover, decided to combat the alarming levels of employment, production and gross domestic product in the form of the Great Depression using austerity. The government paid farmers and other food producers not to produce goods. There was a production surplus, due to the economic recession, and wages decreased, the marginal propensity to consume of individuals and families decreased substantially. Hoover "tightened his belt" and watched his people die. He was adamant that putting Americans back to work would solve the crisis, however, he did not grant relief to the American people in the form of socially reformed welfare programs to combat what they were facing. Hoover's approach to fighting the crisis was completely opposite to the Keynesian approach. While Keynesian theory dictates that governments should increase spending during recessions and tax less, Hoover spent less during the “belt-tightening” recession and taxed relatively more. Many families abandoned their homes and moved to slums or “Hooverville,” crime increased, adequate healthcare for the poor became an unattainable dream, the quality of education declined, and prostitution for some women was the only option. that they considered possible to feed themselves. their families. The above are just some of the social impacts that austerity had on America during the Great Depression. Although during this period the middle class was on the verge of extinction, there were several families who made fortunes thanks to the misfortune of others, for example the Marriotts. There were also those families who increased their fortunes like the Rockerfellers. National income continued to decline with exorbitant unemployment rates, consumption and investments declined. Hoover did not increase government spending to increase national income, but he reduced government spending and pushed the economy further into recession. What changed you