The Great Depression was caused by the Government's intervention.

The great depression was not caused by the failure of the free market. The invisible hand will always pull an economy out of the dumps if it is left alone. The great depression would have ended much sooner if the federal government if they had left it alone. But as we can see today, the government has a difficult time sanding by and waiting for the invisible hand to sort things out, and therefore creates more problems than there were originally.            

One of the first mistakes of the government was to put into action the Expansionary Monetary Policy that created fake low interest rates.  By trying to expand the economy, this actually overheated the stock market. This decreased the money supply into the economy; because of the low money supply, people were much less likely to spend their money. When people are spending money the economy gets stronger. We see the opposite here, and the economy weakened.

Then the government enacted The Smoot Hawley tariff in the 1930’s, which placed a high tax on imported goods. This tariff kept a lot of trading from occurring, and instead of stimulating the economy it helped to weaken it. By this time America was deep into the depression, the government again would not leave the economy alone. They created the National recovery act of 1933 and the Wagner Act 1935. These were anti business and pro labor regulations that were controlled by the federal government. This also helped to weaken the economy, because when the businesses are suffering the people are as well. Because the businesses were doing badly, that means less jobs for the people as well as they could not create products that the people could purchase to help stimulate the economy. This again kept money from flowing into the economy.

High wage policies enacted by Hoover and Roosevelt kept businesses from hiring and decreased the amount of jobs that were available to the people.

The great depression may have happened whether the government had intervened or not. But the great depression would not have been so terrible if the government had not intervened.