Credit in the Great Depression

The Great Depression's most impactful cause was that of credit. In the roaring 20's money was not used to pay for things. Credit was. When it came time to pay for products obtained through credit, the people could not. This lead to a national debt, as banks ran out of money. Banks had given out risky loans based on credit. When people could not pay back these loans, banks were forced to decalre bankruptcy. When news of banks closing and not having enough money spred, a nation wide panic occured, where people quickly tried to withdraw everything in their savings account. When banks could not give everyone their money, due to extreme withdraws of other members, people were left with nothing. Credit was over used in the 20's leading to the depression through the 30's. Such credit failures are still present today. Banks in the 21st century have given out risky loans to people who can not pay back the credit they have recieved. This is proven in the housing market and increasing forclosure. Credit still impacts the economy now, as it had eighty years ago. The nation is still in debt as a whole, and will be as long as their is credit.