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The New Deal and its Impact on the Great Depression

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.

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1

The severe economic downturn in the U.S. known as the ______ started with a stock market crash in ______.

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Great Depression October 1929

2

To combat the economic hardships of the ______, President ______ initiated the ______, comprising federal programs and reforms.

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Great Depression Franklin D. Roosevelt New Deal

3

FDR's Inauguration Date

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March 1933

4

FERA Purpose

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Provide emergency relief for unemployed

5

AAA Objective

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Support farmers by boosting agricultural prices

6

To tackle the economic crisis, relief programs offered ______ support, while recovery initiatives stimulated the economy through public works and ______ measures aimed to overhaul the economic system for lasting ______.

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direct financial stability

7

Second New Deal year of launch

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Launched in 1935

8

Social Security Act purpose

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Introduced pensions for elderly, unemployment insurance

9

National Labor Relations Act significance

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Strengthened workers' rights, union power

10

To mitigate the effects of the economic slump and stabilize the economy, Roosevelt had to ______ certain ______ programs.

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reinstate New Deal

11

Keynesian Economics: Response to Recession of 1937-1938

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Increased govt spending in 1938 to boost demand and reduce the impact of the recession, demonstrating Keynes' theory effectiveness.

12

Role of Govt Intervention: Economic Distress

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1938 spending hike underscored govt's critical role in mitigating economic crises, aligning with Keynesian advocacy for intervention.

13

Roosevelt's controversial proposal to add more Supreme Court justices, termed the '______-packing plan,' encountered significant criticism and did not succeed.

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court

14

1937 US Housing Act Purpose

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Funded public housing for the poor.

15

1938 Fair Labor Standards Act Provisions

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Established minimum wage, overtime pay, child labor laws.

16

Rural Electrification Administration Goal

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Promoted electricity access in rural areas.

17

The ______ New Deal had a more restricted effect due to political opposition and a pivot towards gearing up for possible engagement in ______.

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Third World War II

18

It was the extensive industrial mobilization for the ______ that finally ended the ______ in the United States.

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war effort Great Depression

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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.
1930s-style monochrome photo depicting a diverse breadline with men in suits, women in dresses, and a simple soup kitchen against an Art Deco cityscape.

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.