Summary:
A short overview of the New Deal, a plan enacted by President Franklin D. Roosevelt to end the Great Depression. The intent of the New Deal was to to help the unemployed get back on their feet, to regulate the banks and stock market, and to work with business to help with the economic recovery.
The New Deal
The New Deal was a quite coherent economic plan that helped the nation's economy through its hardest of times. The New Deal provided several key ideas that FDR and his staff thought would bring around an economic upturn. There were many ideas floating around at the time about how the economy could be turned around and FDR and his staff chose what they thought was the best and that was a quite stable and coherent plan on paper. The three base principles of the New Deal were to help the unemployed get back on their feet, to regulate the banks and stock market, and a willingness to work with business to help solve the problems.
Roosevelt knew that the only way to get the economy back on track was to get those who were out of work back to working. He understood that when people weren't working they weren't spending money, which does not help the economy. This vicious cycle of unemployment had left many homeless and many more jobless. The Civilian Conservation Corps (CCC) the Tennessee Valley Authority (TVA) and the Public Works Administration (WPA) all provided government jobs to those who couldn't find work. The TVA especially helped some of the poorest in the nation. Those in the Tennessee valley had a very low standard of living and many of them found jobs working for the TVA. The economy needed a boost and FDR knew that it took people spending money to get that boost, and people need jobs to spend money.
The New Deal also stressed the importance of regulation of the banks and stock market for not only the recovery of the economy but also the stabilization of it later. The stock market crash cannot be blamed for the depression but it was definitely the straw that broke the camels back. The lack of government regulation caused the market to become weak even when everyone thought it was strong. So the New Deal enacted the Securities and Exchange Commission (SEC), which had power to regulate the market and make sure everything stayed legal. When the market went south the banks couldn't handle the withdrawals and many had to close their doors. Banks are a key element in the economy and FDR enacted the FDIC and Emergency Banking Relief Act, which allowed the banks to get back on their feet and provide the economy with money. Government regulation of the stock market and banks allowed for the economy to start rising again after the bottom fell out.
The chief driver of a capitalist economy is business. FDR and his staff understood that without a boom in business that economic recovery would be very slow happening if it even happened at all. The National Industrial Recovery Act (NIRA) and the National Recovery Administration (NRA) set fair prices on industry and helped business regain a profit in hopes that the money would trickle down to the workers which would be put back into the economy, reversing this whole cycle. Getting businesses to make a profit and put money back into the economy was a big factor in the US getting out of the depression.
The New Deal was quite a solid plan of economic resurgence. Some say that it was too little to late, and that FDR didn't infuse enough money into the economy. The plan was solid although it could have been executed more efficiently. The basis for the New Deal was stabilization of the economy, and the New Deal definitely led to that.
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