Was the New Deal helpful for America, or not?

by conmanthestinkygoobe
BeondTheGrave

That depends on your political perspective.

See the problem is, its hard to tell whether the New Deal actually did anything, or if the economy was getting better and the New Deal coincidentally happened. Many political groups, like Libertarians and Anarcho-Capitalists will tell you that the New Deal either A) Did nothing to help the economy, or B) actually slowed down the speed of American recovery. Many who support a strict Laissez Faire economic policy will attempt to bend history to suit their agenda.

On the other hand, there is a group of liberals (they are called the "New Dealers", the "New Left", or the "Neo-New Dealers". These are people who supported FDR, or who supported LBJ's Great Society.) They argue that the New Deal was the reason why America pulled out of the Great Depression. They cite the competing policies of Hoover and FDR, as well as the fact that the Depression only broke after FDR's 100 days campaign.

So you can see the major debate between those groups. And the issue is even more muddied by FDR's rapid response upon assuming the presidency, his first 100 days saw the launching of landmark New Deal Programs. So FDR's administration is deeply linked with both the New Deal spending, along with general recovery.

So did the New Deal actually help or not? Well its hard to say for 100% sure either way (which is why their is such a debate on the topic). But I generally tend to think that it did. I think there are two major problems which faced America in the Depression, 1) a crisis of confidence, and 2) the vicious cycle of overproduction (Produce goods, consumption decreases, price falls, produce more goods, price falls further, produce more goods, price falls, ect., and work in a healthy dose of layoffs, which of course cut consumption even more). To the first crisis, the Hoover Administration did little to boost the confidence of the common American. Hoover took a top down approach to helping America, which really distanced himself from the people. Add in that Hoover himself was a distant president, and you see why many people didnt like him. FDR, on the other hand, pushed through major financial reforms, restructured American banking, and above all used his affable character to speak directly at the hearts of the American People.

Secondly, he used New Deal programs to break the cycle of Overproduction/Underconsumption. This was especially apparent in the Farming sector, where overproduction had ruined the price of food (it was so expensive to raise, then ship food that farmers would literally lose money trying to sell their products). Roosevelt broke the cycle and forced the system to correct itself.

Overall, the spending that Roosevelt did, I think, really put the economy back together. Capitalism in the United States was in danger of failing in the United States, but Roosevelt really pulled the system back together, and put America back on its tracks. So I think his spending programs really helped. And to help prove that point, Ill leave you with This Graph, it charts unemployment during the Depression years. Youll see that it increases to almost 25% during the Hoover years. In 1933, you see unemployment radically decrease as FDR's New Deal programs all took effect. Unemployment steadily decreases until the late 30s. This was when Republicans began attacking the New Deal, dismantled many of its programs, and really cut into New Deal spending (this was also the period of the famous Supreme Court Packing scandal). Unemployment remains high until the 40s, when war production begins to hoover(no pun) up all available manpower. And then the United States enters World War Two right on the 1942 line. I have no way of explain this data, except to suggest that when the government refused to spend money, unemployment went up. When it did spend money on social programs, unemployment went down. And we see the two major periods of spending there, the New Deal and World War Two.