How did the Great Depression affect the nation, economically and psychologically?
It was the worst economic crisis that ever struck the United States and it became a national trauma
After the Black Thursday in 1929, the Great Depression started. Thousands of banks and businesses failed. Millions lost their jobs(unemployment was almost nonexistent during the twenties). People hit the roads all across looking desperately for jobs. Some from the Midwest migrated to California(Steinbeck pictured the plight of those people in his novel "The Grapes of Wrath". it was adapted very quickly in a movie
No economic crisis since then was a comparable shock, indeed the crises that occurred in the seventies and after 2008 had a impact far less traumatic on unemployment and poverty. Some asscociate this progress with the creation of the Welfare State in the thirties(notably with the introduction of the New Deal). Psychologically it did not leave only a collective trauma, it improved the image that people had of the federal government since America was created based on freedom and government was seen as the main threat of the latter.
The very label "Great Depression" clearly conveys how traumatic such a period was. Though it had already been used for the cycle of crisis that had lasted from 1873 to 1896, and it was much less appropriate for the latter as the situation was actually much worse in the thirties.