Question

how to affect the new deal after the role of the national government? essay

Answer 1

The New Deal was a series of domestic policies implemented in response to the Great Depression under President Franklin D. Roosevelt that greatly expanded the role of the federal government in economics. The word New Deal stems from the speech made by Franklin Roosevelt in 1932, accepting the nomination for president of the Democratic Party. At the Roosevelt convention, he announced, "I promise you, I promise myself, a new deal for the American people." Although Roosevelt at the time had no clear policy ideas in mind, the term "New Deal" came to encompass his many initiatives designed to lift the United States out of the Great Depression.

The New Deal created a broad range of federal government programs that sought to offer economic relief to the suffering, regulate private industry, and grow the economy. The New Deal is often summed up by the “Three Rs”:

• relief (for the unemployed)
• recovery (of the economy through federal spending and job creation), and
• reform (of capitalism, by means of regulatory legislation and the creation of new social welfare programs)\

Roosevelt's New Agreement significantly increased the size and reach of the federal government, and thereby radically reshaped American political culture around the idea that the government is responsible for its people' welfare. As one historian put it: "Until the 1930s, the issue of whether the federal government would interfere was always the topic of national political discussion.

The First New Deal (1933-1934)

The country had spiraled downward into the worst economic depression in its history at the time of Roosevelt's inauguration on 4 March 1933. Industrial production was just half of what it was three years earlier, the stock market just marginally recovered from its devastating losses, and unemployment stood at a record 25 percent. The First New Deal started in a whirlwind of legislative action dubbed "The First Hundred Days." From March to June 1933, at the behest of Roosevelt, Congress passed legislation aimed at resolving the financial crisis, unemployment, and poor industrial efficiency, inter alia, through a "alphabet soup" of new laws and agencies. Two of the most important of these, were:

he Agricultural Adjustment Act (AAA), which boosted agricultural prices by offering government subsidies to farmers to reduce output.

The Civilian Conservation Corps (CCC), which employed young, single men at federally funded jobs on government lands.

The Federal Emergency Relief Act (FERA), which gave federal grants to states that funded salaries for government workers as well as local soup kitchens and other direct-aid to the poor programs.

The National Recovery Act (NRA), which sought to boost businesses’ profits and workers’ wages by establishing industry-by-industry codes that set prices and wages, as well as guaranteeing workers the right to organize into unions.

The Federal Deposit Insurance Corporation (FDIC), which guaranteed individuals that money they deposited in a bank would be repaid to them by the federal government in the event that their bank went out of business.

In 1934, Roosevelt supported the passage of the Securities and Exchange Commission (SEC), which brought important federal government oversight and regulation to the stock market.

The Second New Deal (1935-1938)

The second phase of the New Deal focused on increasing worker protections and building long-lasting financial security for Americans. Four of the most notable pieces of legislation included:

The Works Progress Administration (WPA), which employed millions of Americans in public works projects, from constructing bridges and roads to painting murals and writing plays.

The Wagner Labor Relations Act, which guaranteed workers the right to form unions and bargain collectively.

The Social Security Act, which required workers and employers to contribute—through a payroll tax—to the Social Security trust fund. That fund, in turn, makes monthly payments to retirees over the age of 65, as well as to the long-term disabled.

The Fair Labor Standards Act, which mandated a 40-hour work week (with time-and-a-half for overtime), set

an hourly minimum wage, and restricted child labor.

The legacy of the New Deal

By increasing market demand, Roosevelt's New Deal aimed to revitalize the economy. The New Deal supported spending on the federal deficit to stimulate economic growth, a fiscal policy that came to be synonymous with British economist John Maynard Keynes. Keynes argued that government spending that puts money in the hands of customers will allow them to purchase privately made goods. And, as companies sell more and more goods, they would have the money to recruit more and more employees, who could afford to purchase more and more goods, and so on In this way, Roosevelt and his supporters theorized, the downward economic trend of the Great Depression might be reversed. However, the New Deal had only partially been effective. In 1935, the Supreme Court ruled against many New Deal proposals causing a disappointed Roosevelt to propose that the Supreme Court would be expanded to as many as fifteen judges (a political error that would haunt him for the remainder of his career). Despite the New Deal's lofty dreams, the United States only fully recovered from the Great Depression due to massive military spending brought on by the Secon. Nevertheless, key elements in the New Deal remain with us today, including federal regulation of wages, hours, child labor, and collective bargaining rights, as well as the social security system.

Fiscal Stimulus

Although the economy experienced a strong recovery in the 1940s, this resilience can be claimed by a different school of thought due to the major fiscal stimulus brought on by an rise in government expenditure for the war effort. This more keynesian viewpoint would argue that Roosevelt's policies were far too limited to implement a fiscal-stimulus-driven economic recovery. To believe that the New Deal was a moment of great expansionary fiscal policy is a myth. Many of the New Dealers were very fiscal conservative, and the social services they introduced were combined with significant tax rises. They claimed that debt-financed investment, as suggested by the British economist John Maynard Keynes, posed more of a challenge than a stimulus to the economy. Philip Harvey suggests that Roosevelt was more interested in resolving social welfare issues than in developing a macroeconomic stimulus package in the Keynesian style.14 In 1932, Roosevelt thought that the challenge he faced was "not to find or exploit natural resources or simply to create more products," but "the soberer, less dramatic challenge of handling capital and plants already in hand ...of distributing wealth and products more equitably.” The primary concern was not increased production and economic activity, which coupled with fiscal conservatism, guaranteed any increase in social spending would be far too small to kick-start a reeling economy. With this view, it would take the increased spending from the war effort to give the economy the boost it badly needed.

The Bottom Line

The New Deal policies implemented by Roosevelt went a long way in helping to reduce income inequality in America. But with regard to the task of reviving an economy in crisis, the New Deal is considered by many to have been a failure. While debates continue as to whether the interventions were too much or too little, many of the reforms from the New Deal, such as Social Security, unemployment insurance, and agricultural subsidies, still exist to this day. If anything, the legacy of the New Deal is that it has helped to create greater equality and welfare in America.