Deflation
Deflation occurred periodically in the U.S. during the 19th century (the most important exception was during the Civil War). This deflation was at times caused by technological progress that created significant economic growth, but at other times it was triggered by financial crises — notably the Panic of 1837 which caused deflation through 1844, and the Panic of 1873 which triggered the Long Depression that lasted until 1879. These deflationary periods preceded the establishment of the U.S. Federal Reserve System and its active management of monetary matters. Episodes of deflation have been rare and brief since the Federal Reserve was created (a notable exception being the Great Depression) while U.S. economic progress has been unprecedented.
History of Western civilization
In October 1929 the New York stock market crashed, leading to the Great Depression. Many lost their life's savings and the resulting decline in consumer spending led millions to lose their jobs as banks and businesses closed. In the Midwestern United States, a severe drought destroyed many farmers' livelihoods. In 1932, Americans elected Franklin D. Roosevelt president. Roosevelt followed a series of policies which regulated the stock market and banks, and created many public works programs aimed at providing the unemployed with work. Roosevelt's policies helped alleviate the worst effects of the Depression, although by 1941 the Great Depression was still ongoing. Roosevelt also instituted pensions for the elderly and provided money to those who were unemployed. Roosevelt was also one of the most popular presidents in U.S. history, earning re-election in 1936, and also in 1940 and 1944, becoming the only U.S. president to serve more than two terms.