Question

Cause that personal debt impacted the great depression

Answer 1

Because when people go into debt they can't pay for thing and that messes up the business cycle because people file for bankruotys and the unemmoymet rate goes up and people buy less stuff and businesses go out of buisness.

Answer 2

What happened was that there were people ( quite honestly not a great percentage) who invested their money into stocks. They would take out loans for investing in stocks. When the stock market crashed, people started to get their money out of the banks. Obviously the banking system isn’t at all like to day, so the more people started pulling money out the less money the banks had, which ended up causing a major outrage, people who’s money that was in the bank is now gone, and they have no way to get it. The banks weren’t attached to the government with a flow of cash going into the bank every now and then, so they literally all ran out of money. Which means people with money in the bank have no money to get. Which lead to our economy declining into the Great Depression