What governmental ideas, policies, and actions of the 1920s set the stage for the Great Depression

The government policy of Laissez-faire contribute significantly to the Great Depression of the 1930's.

Laissez-faire is an economic philosophy based around the idea of little to no government interference in the economy. This means a very small amount of regulation for businesses, banks, and the stock market. During the 1920's, the unregulated stock market was where people thought that they could get rich quick with no risk. Banks bought into this belief and gave out tremendous loans to individuals with only a small amount of money. When the Stock Market crashed in 1929, people lost their entire life savings and banks ran out of money, as very few people could pay back their loans.