“It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something, “-Franklin D.
Roosevelt. That’s just what he did with the New Deal. He tried his best to solve the depression but ended up only making it worse. The New Deal did not improve the depression.
With his election in 1932, FDR promised a New Deal for America. That New Deal was supposed to revive the economy and bring relief. With 40% of the banks closing down, FDR tried to recover them by issuing the Emergency Banking Act.It created a system of sound banks under the Treasury’s supervision. With this act introduced, billions of dollars were flooded back into the reopened banks, stabilizing the issue.
Thinking that the cause of economic instability was a slowdown of farming, FDR enacted several acts to help the farmers. This entailed keeping production prices down and keeping sales prices up. In the end this helped the farmers. With these examples, it may seem like he helped a great deal, huge issues still remained. The unemployment rate remained the same throughout the depression.A quote from one of FDR’s best friends, H.
Morgenthau Jr. reads,” I say after eight years of this administration we have just as much unemployment as when we started. ” Unemployment remained above 20% at the time. In addition, due to the deficit spending, national debt doubled. With all the work programs FDR set up, it was costing more than the government could afford. This brought the top marginal rate to over 60% throughout the depression. If you are trying to help people does it make logical sense to make them pay you? No, it doesn’t.
FDR’s programs trying to help the people ended up doing nothing. I do not think the New Deal solved the Depression. If anything, it just dragged it out. The programs the government set up had to be paid with taxes, which meant an increase in taxes, which basically brought them in a complete circle. The government should have just stayed out of it and let the free market sort itself out. Also, with the New Deal came more government involvement.
This still affects us today. Until the New Deal, the Constitution had been adhered too much more closely.With all the programs FDR set up, it was WWII that eventually drew us out of the Depression. Government involvement was probably the biggest issue with the Great Depression. Did the New Deal solve the depression? With the stock crash people were frantic for a change.
While FDR tried to provide that change, he didn’t quite make it. In fact, he made it worse. Although he did revive the banks and helped with the farming crisis, he did not decrease the unemployment and he doubled the national debt. With the New Deal, the good did not outweigh the bad.