How Did The New Deal Affect The Economy Of The 1930s

In 1929, after the stock market crash, the United States of America was plunged into a deep economic crisis, first time ever in the country’s history. There were many underlying causes to this. During the 1930s, the banks failed miserably and since their deposits were not insured, people lost all of their savings. As the situation deteriorated, the purchasing capacity of the average American fell, thus decreasing production which ultimately resulted in joblessness. Moreover, the Smoot-Hawley Tariff Act, 1930, further raised the US tariffs to such excessive levels that affected America’s trade relations with foreign countries, thereby, furthering the economic downfall. President Hoover reacted to it in a very narrow manner. His main aim was to restore the banking
President Hoover though tried to push the economy further, but with little or no success at all which ultimately led to his downfall. After succeeding Hoover, President Roosevelt took active steps in recuperating the economy. His “New Deal” was actually a multifaceted initiative that provided relief, helped in recovery and brought new reforms. President Roosevelt made social welfare a priority for the federal government, thus redefining the role of the federal government. Under the new deal, the banking system was recovered through the Banking Act 1933. It established the Agricultural Adjustment Administration (AAA) for recovering the agricultural sector of the country. Other significant measures of the “New Deal” include Works Progress Administration and the Civilian conservation Corps. With the Social Security Act, Roosevelt supported the older generation through pensions, provided compensation to the unemployed and provided financial assistance to dependents like children and other physically disabled persons. Though the New Deal couldn’t fully restore the nation’s economy, but lessened the effects of the Great Depression to a large