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The New Deal: Did It End the Great Depression?

By mmv123 Feb 17, 2014 1669 Words
American History
30 September 2012

The New Deal Helped end the Great Depression
The New Deal had a primary role in helping end the Great Depression, but it didn’t actually end the Great Depression. The Great Depression was a severe worldwide economic collapse in the decade after World War II. The stock market crashed in October of 1929, causing stockholders to lose billions of dollars. Banks shortly started closing and people lost their savings, causing people to have no money or jobs. President Franklin D. Roosevelt, in office from 1933 to 1945, had a plan to help end the Great Depression and get people back on their feet, called the New Deal. The New Deal helped youth agencies and income distribution, provided everyone with medical attention, and produced programs to help people recover from the Great Depression hardships.

The New Deal helped youth agencies pick up and provide jobs and support for the children affected by the Great Depression and unemployment. Although the Roosevelt administration eventually came to respond to the plight of the young, it did so quietly, after first subsuming it within the vast, amorphous problem of “unemployment.” There were obvious needs for the youth of society during the economic collapse during the 19th century. Children needed jobs in order to collect an income to nurture themselves, but also their family. The Great Depression threatened the futures of tens of millions of Americans, but perhaps none so enduringly as the young. The CCC (Civilian Conservation Corps aided youth before 1935 in the course of helping such causes as college budgets and conservation. For example, it aided 250,000 young (eighteen to twenty-five), mostly urban men in 1933, the mean worked mostly at bucolic tasks that were noncompetitive with adult labor and ill-suited to prepare them for industrialized work. By February 1934, the New Deal authorized the FERA (Federal Emergency Relief Administration) to provide one hundred thousand college students the part time jobs they needed to remain in school. Later the student-aid programs of FERA extended its services to high school students, aiding 390,000 in the first year. These programs provided the proper services to youth that were needed during the time, and would later help them get jobs in their future (Reiman).

The Great Depression and the New Deal had a paradoxical effect on the distribution of income in the United States. On one level, even though the incomes of the rich declined precipitously as the economy fell apart, the Depression exacerbated economic inequality by increasing the numbers of the poor. This not only reiterates the fact that the Great Depression didn’t only affect the poorest of the poor, but the richest of the rich, obviously the impact differed based on how wealthy the people were. During the 1920’s, income inequality widened rapidly, and during the early years of the Depression, the distribution of incomes became more dispersed as poverty spread, reaching its peak for the century. Even though, income distribution was getting worse throughout the early 1900’s, it was soon to somewhat bounce back. In the 1930s income inequality began to decline, and during World War II it narrowed rapidly. After the war, the distribution of incomes remained fairly stable, though it continued to narrow slightly throughout the postwar economic expansion. In the Revenue Act of 1935 (otherwise known as “wealth tax”), President Roosevelt sought to meet these populist critics. The law boosted the top personal income tax rate from 63 to 79 percent, expanded estate taxes, and increased the corporate income tax to fall more heavily on large corporation. This clearly didn’t make the wealthier people happy, but it was helping a lot of people out in very diverse and indirect ways. Roosevelt’s willingness to change the tax system in response to mass political pressure and to levy taxes on the incomes of rich helped make it possible to use the progressive income tax more broadly as the basis for federal revenues and social wealth (Phillips-Fein).

The New Deal helped everyone have full coverage of medical support after the economic collapse caused suffering for many people. The consequences of the sudden, enormous unemployment after 1929 fell first on local governments, which, as they always had, retained primary responsibility for relief of the poor. But relief payments were pitiful, and private agencies also could not cope with the massive unemployment and suffering. As early as June 1933 the Federal Emergency Relief Administration used some of its funds for medical care, nursing, and emergency dental work and Civilian Conservation Corps workers received medical care as part of their benefits. The Civil Works Administration promoted rural sanitation and helped control malaria; both the Works Progress Administration and the Public Works Administration built hospitals, sewer plants, and other public health projects. The New Deal also extended the government’s role in public health by providing states funds on a matching basis for maternal and infant care, rehabilitation of crippled children, and general public health work. A national Health Survey in 1935-1936 confirmed that the lowest economic groups were at the greatest risk for sickness and disability, while receiving the least medical care. Obviously the amount of medical care people were getting was not fantastic, but they were just trying to help everyone suffering economically and physically in the most applicable way they possibly could in order to help all of the other people suffering that were either in worse condition or the same. Therefore, Roosevelt attempted and to some extent succeeded with helping people with their medical conditions, so people can’t say he never tried to make a difference with the health situation (Health and the New Deal).

President Roosevelt wanted to help everyone he could recover from the economic downpour, so he promoted many different programs to help recuperate peoples’ living conditions. Congress took another step to reorganize the banking system by passing the Glass-Steagall Act of 1933, which established the Federal Deposit Insurance Corporation (FDIC). It provided federal insurance for individual bank accounts of up to $5,000, reassuring millions of bank customers that their money was safe. Congress and the president also worked to regulate the stock market, in which people had lost faith because of the crash of 1929. The Federal Securities Act, passed in May 1933, required corporations to provide the complete information on all stock offerings and made them liable for any misrepresentations. Along with the Federal Securities Act, in June of 1934, Congress created the Securities Exchange Commission (SEC) to regulate the stock market. One of goal of the commission was to prevent people with inside information about companies “rigging” the stock market for their own profit. Everyone was more protective and scared to put their money in stocks because of the crash in 1929, but Roosevelt wanted people to know that their money was in safe hands. Another Act produced was the Agricultural Adjustment Act (AAA) that sought to raise crop prices by lowering production, which the government achieved by paying farmers to leave a certain amount of every acre of land unseeded. The theory was that reduced supply would boost prices. The Civil Works Administration (CWA) was established in November 1933. It provided 4 million immediate jobs during the winter of 1933-1934. The CWA built 40,000 schools and paid the salaries of more than 50,000 schoolteachers in America’s rural areas. Roosevelt enforced the Home Owners Loan Corporation (HOLC) that provided government loans to homeowners who faced foreclosure because they couldn’t meet their loan payments. The Social Security Act, passed in 1935 helped many different people, but the elderly especially. Old-age insurance for retirees 65 or older and their spouses, the insurance was a supplemental retirement plan (Danzer).

Although the New Deal helped people recover and make countless things better from the brutal economic corruption of 1929, it didn’t officially end the Great Depression. Roosevelt did indeed made specific efforts and plans that reversed the economic decline to some extent, while some plans fell through others helped many people move forward with their lives. In order to focus on what President Roosevelt initiated and proposed, here is a recap of some of the things he accomplished. From 1933 to 1938, Roosevelt proposed and had enacted many innovative pieces of legislation he termed the “New Deal.” The purposes of the New Deal were to stop and reverse the economic decline, put people back to work, and provide security for the elderly and those who could not provide for themselves. Roosevelt did not pursue specific civil rights legislation, but he did much to break down color barriers within the federal government. He secured the appointment of many blacks to upper-level positions within the administration. Many of the laws enacted during the early days of the New Deal were hastily drafted and flawed. The United States Supreme Court declared several to be unconstitutional. Roosevelt made an attempt to pack the Supreme Court with more liberal judges to reverse these decisions, and when that effort failed, he turned to more traditional political efforts. Taxes were raised for the rich, and strict regulations were put in place under existing laws. By the end of the decade, however, unemployment was still over 17 percent. So, although a lot of progress was made within his term in office, there was still work to be done in the future to officially end the Great Depression (Dawson).

President Roosevelt clearly dug a lot of people out of the ground by the New Deal, and it is clearly one of the most successful plans to be carried out in Presidential History. A vast majority of his plans within the New Deal were carried out and successful, while a few crumbled. The primary focus of the impact the New Deal had was that a lot more people had jobs, medical coverage, and money in their pockets. It’s apparent that Franklin Delano Roosevelt was a successful president and made a lot of people happy because he is the only president who has served more than two terms in office (March 4, 1933 – April 12, 1945). The New Deal helped youth agencies and income distribution, provided everyone with medical attention, and produced programs to help people recover from the Great Depression hardships.

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