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However, if you had that money instead invested in corporate stocks, the intrinsic value of that corporation stock should keep pace.

Why would you think that? The "value" of a stock is in 1) the demand for it which is a function of 2) expected future cash flows. And, of course, the ability to buy them because of excess capital somewhere. Ignoring that a very high percentage of businesses went under during the Depression, thereby rendering their stocks worthless, the capital markets - even the ones still breathing collapsed, companies were unable to pay their bills, future prospects were grim - a self-fulfilling prophesy which unfortunately came true.

Here's what happened in Germany:

September 1928 650,000 unemployed
September 1929 1,320,000 unemployed
September 1930 3,000,000 unemployed
September 1931 4,350,000 unemployed
September 1932 5,102,000 unemployed
January 1933 6,100,000 unemployed

Companies throughout Germany - though primarily in the industrial zones such as the Ruhr - went bankrupt and workers were laid off in their millions. Unemployment affected nearly every German family just 6 years after the last major economic disaster - hyperinflation - had hit Weimar.

IOW, during the currency meltdown, your investments might not be able to keep you going. You might have to postpone retirement OR return to the work force.

Most people were not given the choice to "postpone" retirement, they were shoved out of the workforce. Unemployment hit 30% within a couple years, and that number would have been far higher if many companies hadn't forced workers to work part-time, rather than full-time to preserve jobs. These people couldn't "return" to the work force, there was NO WORK.

example of this would be going into the Great Depression. The real value (investment wise) of various stocks was actually higher than the stock prices indicated (because no one was able to buy them from you).

That's pretty much the definition of "worthless." If you have pockets full of $1,000 bills, but you are on the Titanic as it is going down, the "value" of your value is nil. Nobody will buy it from you. That's "worthless."

You could have done much better if you had the ability to purchase stocks after the end of the stock market crash.

Who didn't know that? Trouble was, nobody had any money.

The history of the early century is an interesting one. Hitler turned Germany into a command economy. In Russia the revolution had deposed the power structure in favor of a system which promised "equality." In America (and Britain, France, etc.) the economies collapsed, and a concordant rise in socialist and communist (small "c") theories took root. (You might remember the McCarthy hearings 20 years later railing about all those poor young dupes who went to a Communist (capital "C") Party meeting.

People were desperate; they care little about precious economic theories when they can't feed their kids. The old social structures were gone; few people lived on the farm anymore, the industrial revolution saw to that. There weren't multigenerational homes - and there wasn't work, and without work there wasn't food. Out of all of that came the various governmental social safety nets - out of a need for stability, not because people thought it would be fun to take money from some people and give it to others.

As it turns out, those safety nets have worked fairly well over time, not perfectly mind you, and sometimes with excess, but overall most advanced countries have followed (or in some cases led) with similar programs which are designed to meet the same goals. And most of those countries have had stability - and prosperity - for the better part of the last century. I think there's something to be said for that.
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