The Economic Bubble

     The American economy was in an exciting place during the 1920's. A combination of separate things influenced the economy in an interesting and eventually dangerous way.

     Before the many Americans had been through a time of financial savings. This was due to the largest war the world had seen. The war caused a national hard time to overcome the U.S.. Once the war was over, most of the population had saved enough money to have some financial freedom as the economy returned to normal.

     The financial mindset of the American public shifted during the twenties. This was shown as two Republican Presidents were elected throughout the decade. Their belief of big businesses with less government interference was embraced by the people.

    There were many new innovations that thrived during the this time. A prime example of one of these new machines was the Model T. The Model T first came out in the 1908 and grew to an annual sale of almost a half a million cars per year by 1920. Within the ten years from 1920-1930 the numbers of automobiles had tripled. The number of new cars helped and created a multitude of businesses around the country. Things such as tire companies, roadside restaurant, other car services each flourished in the new economy.

    Fraud was a major cause for what seemed to be thriving economy. One problem which would later be found was stock fraud. Many companies would falsely report their stock to encourage other potential investors to invest in their business. This temporarily boosts the their stocks but is eventually detrimental to the economy. Another thing that changed the economy was prohibition. Money that would usually have gone to the alcohol industry was now going to bootleggers. This illegal business kept millions of dollars out of the normal economy each year.

     The 1920's seemed to be a time of economic prosperity for Americans. This was built off of saved money, a new financial culture, thriving innovations, and unlawful business practices.

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