Question

Discuss the Great Depression. How were the actions of presidents Hoover and Franklin Roosevelt similar and how were they different? List some specific actions/programs taken by both presidents. What were the short-term and long-term significances of these federal government actions?

Answer 1

Great Depression : Great depression hit US economy in 1929 and its impacts were felt up to second world war. Great depression was characterized by the profound fall in aggregate demand in economy and further it dampened business sentiments and investment fell multifold. Output fell drastically and there was dramatic rise in unemployment level.

Hoover and Roosevelt were presidents through great depression,

Similarities:

both supported government intervention and rise in public spending to deal with great depression. Various public works were carried out during this period to infuse purchasing power in economy. NEW DEAL of program which was conceived during the Hoover but it was implemented by the Roosevelt, flurry of public works was carried out under the New Deal and lots of employment opportunities were created.

Differences:

both presidents were in support of government interventions but Hoover in most of cases did not support direct actions by government. He did not support direct transfer to general public and further, he indirectly supported to business houses. He was worried that excessive intervention by the government would fundamentally change the role government in economic activities while president Roosevelt supported direct actions by government.

It helped to reduce the impact of recession in short run, but it fundamentally changed role of government. Some scholars argue that extension in role of government prolonged recession in long run.