The New Deal and its Impact on the Great Depression
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The Great Depression's economic turmoil led to FDR's New Deal, a series of programs for relief, recovery, and reform. It included the Social Security Act and the Wagner Act, aiming to stabilize the economy and improve social welfare. The New Deal's legacy, influenced by Keynesian economics, was pivotal in America's recovery, with World War II eventually ending the economic crisis.
Summary
Outline
The Great Depression and Roosevelt's New Deal Response
The Great Depression, beginning with the stock market crash in October 1929, was a period of severe economic downturn in the United States. It was characterized by a catastrophic fall in stock prices, widespread unemployment, and a significant decline in economic activity. By 1933, up to 25% of the workforce was unemployed, and those with jobs faced reduced wages. In response to this crisis, President Franklin D. Roosevelt (FDR) launched the New Deal, a series of federal programs and reforms designed to restore confidence in the economy and provide relief to the suffering population.The First New Deal: Immediate Action for Recovery
Franklin D. Roosevelt took office in March 1933 and immediately embarked on an ambitious plan to address the economic collapse through the First New Deal. During the first hundred days of his presidency, he enacted a flurry of legislation aimed at providing emergency relief and stabilizing the financial system. Key components included the Federal Emergency Relief Administration (FERA) to aid the unemployed, the Agricultural Adjustment Act (AAA) to support farmers, and the National Industrial Recovery Act (NIRA) to stimulate industrial recovery. These measures demonstrated Roosevelt's belief in proactive government intervention to combat the economic crisis.The Three R's: Relief, Recovery, and Reform
The New Deal was structured around the "Three R's": relief for the unemployed and poor, recovery of the economy to normal levels, and reform of the financial system to prevent a repeat depression. Relief programs provided direct support to those in need, recovery efforts focused on revitalizing the economy through various public works and financial reforms, and reform measures aimed to restructure the economic and financial systems to ensure long-term stability. This comprehensive approach sought to address both the immediate and underlying issues of the economic collapse.The Second New Deal: Expanding the Social Safety Net
The Second New Deal, launched in 1935, expanded upon the initial efforts with a greater emphasis on social welfare and labor protections. Notable legislation included the Social Security Act, which introduced pensions for the elderly and unemployment insurance, and the National Labor Relations Act (Wagner Act), which strengthened the rights of workers and unions. These initiatives reflected Roosevelt's commitment to creating a more equitable society and the belief that the government had a responsibility to ensure the welfare of all citizens.The Third New Deal and the Recession of 1937-1938
As the economy showed signs of improvement, Roosevelt's administration reduced New Deal spending, which contributed to a sharp economic downturn known as the Recession of 1937-1938. This recession underscored the economy's continued dependence on government spending and the risks associated with premature fiscal austerity. In response, Roosevelt reinstated some New Deal programs, which helped to stabilize the economy once again.Keynesian Economics and the Role of Government Spending
The New Deal was influenced by the economic theories of John Maynard Keynes, who advocated for increased government spending during economic downturns to stimulate demand and create jobs. The Recession of 1937-1938 seemed to validate Keynesian economics, as the subsequent increase in government spending in 1938 helped to mitigate the downturn. This experience reinforced the idea that government intervention was crucial during times of economic distress.Challenges to the Third New Deal
The Third New Deal, which included additional relief and reform measures, faced significant challenges from a conservative coalition in Congress. This coalition opposed further expansion of government programs, particularly those perceived to benefit minority groups. Additionally, Roosevelt's attempt to increase the number of Supreme Court justices, known as the "court-packing plan," was met with widespread criticism and ultimately failed, weakening his influence over subsequent New Deal legislation.The Third New Deal: Legislation and Programs
Despite opposition, the Third New Deal saw the passage of important legislation and the continuation of programs that aimed to provide economic stability and social welfare. The United States Housing Act of 1937 funded public housing for the poor, and the Fair Labor Standards Act of 1938 established minimum wage, overtime pay, and child labor laws. These efforts, along with others like the Rural Electrification Administration, furthered the New Deal's goal of government involvement in promoting economic recovery and social progress.The Impact of the Third New Deal and World War II
The Third New Deal had a more limited impact compared to earlier New Deal initiatives, largely due to political resistance and a shift in focus towards preparing for potential involvement in World War II. While the New Deal programs helped to alleviate some of the economic hardships, it was the massive industrial mobilization for the war effort that ultimately brought the United States out of the Great Depression. The war's demand for goods and labor led to full employment and set the stage for a period of sustained economic growth in the post-war era.
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Causes of the Great Depression
Stock Market Crash of 1929
The catastrophic fall in stock prices in October 1929 triggered the Great Depression
Widespread Unemployment
Up to 25% of the workforce was unemployed during the Great Depression
Economic Decline
The Great Depression was characterized by a significant decline in economic activity
The New Deal
First New Deal
President Franklin D. Roosevelt launched the First New Deal in 1933 to address the economic collapse
Second New Deal
The Second New Deal, launched in 1935, focused on social welfare and labor protections
Third New Deal
The Third New Deal faced opposition but saw the passage of important legislation and continuation of programs
Three R's of the New Deal
Relief
Relief programs provided direct support to those in need during the Great Depression
Recovery
Recovery efforts focused on revitalizing the economy through public works and financial reforms
Reform
Reform measures aimed to restructure the economic and financial systems to prevent a repeat depression
The New Deal and its Impact on the Great Depression
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00
The severe economic downturn in the U.S. known as the ______ started with a stock market crash in ______.
Great Depression
October 1929
01
To combat the economic hardships of the ______, President ______ initiated the ______, comprising federal programs and reforms.
Great Depression
Franklin D. Roosevelt
New Deal
02
FDR's Inauguration Date
March 1933
