With the American economy and global economy in turmoil for nearly six months, it all came to a peak when the stock market crashed on October 29, 1929. That fateful day in October caused and exacerbated the Great Depression. Although Franklin D. Roosevelt and Herbert Hoover both responded to the Great Depression, Roosevelt was credited as the savior because of his response to unemployment, national debt, and creation of social services. President Hoover was unprepared for the Great Depression, and his limited response was not enough to keep the economy from plummeting further into chaos. The initial reaction to the Great Depression from Hoover was the Smoot-Hawley Tariff Act. This act raised the United States already high tariff rates on imported goods. This caused a reduction in American exports, which caused a reduction of American Jobs. While many Americans had shared his philosophy of limited government intervention, the Great Depression made it clear that a more direct government response was needed. Though the American stance on government aid was shifting, Hoover remained stubborn in refusing to give direct federal aid. Once Hoover recognized the economy would not improve on its own,…show more content… With the debt larger than ever, the main focused turned to the national budget. President Hoover made balancing the budget his top priority. A balanced budget is fine when economies are strong, but they make a weak economy even weaker. During economic hardships, government revenues fall as demands for transfer payments rise, this requires a temporary increase in deficit spending. The problem with President Hoover’s emphasis on maintaining a balanced budget was that once the economy slipped into recession, there was no revenue to balance the budget. This forced Hoover to raise taxes and cut spending in order to balance the budget, and as a result the Great Depression was
