Although the economy had expanded rapidly in the U.S. In the 1920's and seemed prosperous, its growth and prosperity rested on many unstable conditions.Farmers had acquired too much debt expanding after World War 1 and were producing more crops than they could domestically and/or internationally sell. They were not making enough money to pay off there debts.Industrial production outpaced consumption,despite the rises in wages and the easy access to credit that masked the overproduction as well as the growing disparity in wealth.Some people were amassing more wealth than they were spending ,so the money was not flowing back into businesses and workers.The stock market was booming but largely on speculation that also relied on easy credit and continued expansion.when prices began to decline,a chain of panic among investors and depositors resulted in the stock market crash and the bank closures across the nation. Many people lost all their investments and savings . The collapse of the unstable economy led to the banks,farms,and business failures that led to the massive unemployment.Unemployed workers and workers living on reduced wages had less money to spend,which added to the financial crisis. Much like today.
