The Effect of The New Deal on United States' Economy in Crisis

In the midst of the greatest depression in the history of the United States, Franklin D. Roosevelt and his committees drafted The New Deal, consisting of policies which they hoped would help all declining facets of the nation at the time. The American people needed to heed a promising leader that would set plans to end the depression, a change from president Hoover who seemed to have no set plan for foe dealing with such economic crisis. The New Deal aimed to stimulate the economy, create jobs, and lift America out of the economic strife. The controversy amongst historians that surrounds the New Deal is whether or not it prospered in helping America out of a depression. David M. Kennedy argues that the New Deal did indeed serve its

Preceding the Great Depression, the United States went through a glorious age of prosperity, with a booming market, social changes, and urbanization; America was changing. At the end of the 1920’s and well through the 1930’s, America was faced with its greatest challenge yet; the 1929 stock market crash. It would be the end of the prosperity of the “Roaring Twenties”. Now the American government and its citizens were faced with a failing economy. President Herbert Hoover was clueless to how to approach the problem. Hoover believed that government works best when it governs less, and should not intervene in the economy. Traditionally, he stayed out the issue hoping that the economy would fix itself; it didn’t. Hoover’s inaction makes his presidency look ineffective as if he caused the Great Depression. Franklin Delano Roosevelt (FDR) succeeded Hoover as president. Like Hoover, FDR didn’t know exactly how to help the economy. Unlike Hoover, FDR introduced experimental ideas and programs to help solve the issue. These ideas and programs would become a part of Roosevelt 's policies known as the New Deal which sought to fix America’s economic struggles. Despite short term successes, the New Deal implemented during the 1930 's by FDR did not lift the United States out of the Great Depression. Instead by intervening in the economy, and creating huge debt, the New Deal prolonged the Great Depression.

Former president, Franklin D. Roosevelt (FDR) once said, “I pledge you- I pledge myself to a New Deal for the American people.” This quote sums up exactly what FDR did in his time of office; FDR created New Deals for the American people. He believed that the New Deals would help to end the Great Depression. This essay will be on, the economic problems that existed during the Great Depression, the strategies used by Herbert Hoover and FDR to deal with the economic problems, and how the overall effectiveness of the economic programs initiated by Hoover and FDR.

The late 1930s were a time of great suffering and uncertainty in the United States. The country was crippled by effects of the Great Depression; the result was a massive decline in jobs and economic stability that dramatically impacted both rural and urban communities. Millions of Americans were out of work, unable to support their families. State organizations and charities were unable to meet the growing needs of the people and many were left to fend for themselves. The Great Depression brought with it a legitimate, tangible fear about the future of America and its citizens. Upon the outcry of the American people a “New Deal” was struck giving the citizens of America a lifeline of hope in the ever-growing State. The New Deal was a succession of programs, organizations and laws, enacted by President Franklin D. Roosevelt, directly addressing the issues of jobs, welfare and uncertainty through direct federal involvement. The creators of the New Deal worked across party lines to reshape the norms of state involvement whilst making a great legislative effort to turn the declining economy around. The New Deal reshaped the federal government’s relationship with its citizens in a time of economic uncertainty helping to grow the State in a time of peace.

Despite Burton W. Folsom Jr.’s beliefs, Professor Roger Biles says that the New Deal utilized a minimal welfare state and economic stabilizers to steer away from another depression. He believes that very little of the New Deal was actually a new theory. Many of the policies put in place during the New Deal were actually ideas from previous Presidents and political leaders. For example, Woodrow Wilson’s farm credit acts sparked governmental aid to increase farmers’ income. This was not a brand new idea, yet Roosevelt gets quite a bit of credit for it. Whether the New Deal was new and fresh or not, it still failed to restore prosperity in America. However; Biles believes that the economic policies that failed in the 1930s have created many “stabilizers” to help avoid another similar depression.

The National Recovery Administration (NRA) was one of the many administrations that were initiated during the New Deal. This administration was established to help create jobs, increase consumer buying power, and to help create minimum wage. The NRA created a “blanket code” that would make companies have a minimum wage and maximum work hours and was claimed to raise consumer purchasing power and increase employment. These codes were poorly written and had no enforcement mechanisms and many employers ignored them. “Many businesses slanted their NRA codes to provide higher profits rather than the better wages for labor and lower prices for consumers that the cooperative design called for.”The NRA was ran by federal officials with no prior

The implementation of the New Deal was a necessary, yet highly criticized, and controversial time in our nation's history. Its creation, by President Franklin Delano Roosevelt, helped to resurrect a crumbling economy and put Americans back to work. However, like most things in life, there are always two sides to every story. This paper will explore both the pros and cons of FDR's, brainchild, the New Deal. In addition, it will argue that regardless of a positive or negative public opinion, there is no negating the fact that the New Deal was a pivotal movement and progressive step forward in our nation's history.

The Great Depression will forever be a highlighted event in our United States’ history. It was so chaotic and it came with numerous problems that people till this date seek ways to prevent similar events from happening. People at the time came up with different ways to stop a crisis, like the Great Depression, from happening, but this is not as easy as it seems. It is not easy pleasing everyone specially in a country as diverse as the United States. The New Deal was one of these ideas made as a response of the Great Depression, This new plan was brought to light by Franklin D. Roosevelt when he ran for presidency. Roosevelt “landslide” victory allowed for these New Deal to set sail, but along the way many things challenged his New deal. Different businesses and even some strongly supported individuals ended up challenging Roosevelt’s plans and actions.

After the prosperous 1920’s, America headed into what would be none as the Great Depression. The economy crashed and the standard of living for majority Americans was the lowest it has ever been before. America needed a hero, and fortunately, Franklin Delano Roosevelt was elected into office in 1933. He immediately began working on ways to get out of the depression, and he came up with what would be known as the New Deal. The New Deal was praised for how it treated problems involving unemployment, poverty, and other concerns. It did things such as make new jobs, through the WPA (Works Progress Administration) and CCC (Civilian Conservation Corps). By creating new jobs, people were helped physically, mentally and socially. After the Stock Market

In an era known as the darkest time in U.S history the American people of the 1930’s needed something to remedy their failing economy and the dubbed “New Deal” was the answer.

The New Deal steered the American economy in the right direction, but it failed to complete its goal and end the Great Depression. Among its many faults was the time it took to change things- for example, it took until 1943 to fully restore the country back to the way it was pre-Depression. Another fault was the projects and committees- often they were inefficient, using too much material, space, and labor, and contributed to the national debt doubling in just two terms. Unintended consequences riddled the New Deal- economists agree that by creating jobs, others were destroyed. The massive gap between the rich and poor remained big.

The time succeeding Herbert Hoover’s presidency became a period of reconstruction. The Great Depression caused thorough damage through the entire nation. Citizen’s trust stood nonexistent and their motives were vacant. Franklin Roosevelt came into office with upfront critical responsibilities. In order to save what was left of the United States, Roosevelt had to approach the detrimental economy with an open-mind. He came up with many solutions, some received questionable appraisal from the people such as the New Deal. The New Deal served as an attempt to uplift the economy by assisting banks, creating jobs, and financing businesses. In Roosevelt’s mind, government affiliation was vital. The policies sparked controversy among business owners as they argued it was unconstitutional and put capitalism at stake. The New Deal proves effective in saving capitalism by initiating a strong federal government to regulate the economy.

Though the New Deal succeeded in helping people, it largely failed in helping the economy. The National Recovery Administration interfered with the natural workings of the market by setting prices and wages, and fostered cartels rather than supporting small businesses. These cartels set wages above the market rate, which makes labor more expensive and depresses employment. High prices and a high cost of labor also means that the unemployed are both less likely to be hired and also forced to confront a higher cost of living. These measures, when combined with Roosevelt’s other new labor laws like the Fair Labor Standards Act and Wagner Act, were instrumental in supporting his program’s relief efforts and helping the workers, but they didn’t work towards supporting the business community. After Roosevelt reduced federal spending on some jobs-creation projects and increased taxes in 1937, the economy entered another recession and unemployment rose again, demonstrating that the employment created by his New Deal

Roosevelt started with what hurt us the most: the banks. Roosevelt declared a national bank holiday to allow for time to devise a plan that would work in the short and long term. He then set up the Federal Deposit Insurance Corporation (FDIC) to give the people confidence in the new banking system. The FDIC insured that the government would reimburse a customer should their bank fail. The next step was for relief to the “forgotten man”. Harry Hopkins, a New Dealer, supported the Federal Emergency Relief Administrations (FERA). FERA gave four to five million households $20-$30 a month, created jobs, and paid laborers to renovate schools, dig sewers, and fix roads and building. Another relief program was Civilian Conservation Corps, which offered young men who were unemployed a chance to work to preserve natural resources. The CCC saw to water erosion, rivers, and planted millions of trees. They also finished the Hoover Dam. The Works Progress Administration (WPA) gave millions of jobless citizens a chance to earn wages by working on government sponsored jobs. The jobs created by the WPA not only helped those without jobs, but also improved our roads, buildings, and cities as a whole. The New Deal also provided rural communities with electricity through the Tennessee Valley Authority by building

The depression of the 30’s came to many as a great shock, especially after just coming out of the wild and lavish ‘roaring’ 20’s. The sudden shift in the atmosphere; this crash of the stock market (Oct. 29, 1920) seemed to pull the rug out from under the American people leaving many dazed and confused, not knowing where to turn to. All hope was turned to Hoover, -president at the time- but soon any and every last glimmer of optimism turned to dust as Hoover failed to keep his people above water like many past presidents. This is when Franklin Delano Roosevelt stepped into the spotlight and grabbed the bull by it’s horns, imposing what is called “The New Deal” wrangling with the immense economic debt of this country and pulling the