10 Myths About FDR and The Great Depression
7. The Stock Market Crash Precipitated the Miseries of the Depression
While the stock market crash caused many with money invested into the market to suffer, the Great Depression was not precipitated by the stock market crash. What truly happened was that the stock market crash precipitated a host of ill-thought and economically disastrous policies which drain resources and capital from the private sector, causing shortages and raising the cost of living. Policies that dramatically increased government spending were paid for with higher taxes or worse, they were added to the debt for future generations to pay. Liberals and those that favor a large, invasive government like to promote the belief that the stock market crash caused the Depression because it fits with their narrative of the evil capitalists vs. the heroic government.
