New Deal

Definition

The New Deal was a series of programs and reforms initiated by President Franklin D. Roosevelt in response to the Great Depression, aimed at providing relief, recovery, and reform to the struggling American economy. It marked a significant shift in government-business relations as the federal government took a more active role in economic management and welfare, changing the expectations between citizens, businesses, and the government.

5 Must Know Facts For Your Next Test

1. The New Deal consisted of two phases: the First New Deal (1933-1934) focused on immediate relief and recovery, while the Second New Deal (1935-1938) emphasized social welfare and labor rights.
2. Key programs of the New Deal included the Works Progress Administration (WPA), which provided jobs in public works, and the Federal Deposit Insurance Corporation (FDIC), which protected bank deposits.
3. The New Deal faced opposition from both conservatives who believed it expanded government too much and from progressives who thought it did not go far enough in reforming capitalism.
4. One of the lasting impacts of the New Deal was the establishment of a social safety net in the United States, laying the foundation for modern welfare programs.
5. The New Deal reshaped government-business relations by creating new regulatory agencies that aimed to oversee various sectors of the economy and promote fair competition.

Review Questions

• How did the New Deal change the relationship between the federal government and businesses in America?
  • The New Deal significantly altered the relationship between the federal government and businesses by introducing new regulations and oversight intended to stabilize the economy during the Great Depression. The federal government began to play an active role in managing economic activity, ensuring fair practices, and providing support for those affected by economic downturns. This shift resulted in businesses being more closely regulated and reliant on government policies to navigate economic challenges.
• Evaluate the effectiveness of specific New Deal programs in addressing economic issues during the Great Depression.
  • Programs like the Civilian Conservation Corps (CCC) and the Works Progress Administration (WPA) were effective in providing immediate employment opportunities, helping to reduce unemployment rates significantly. The Social Security Act established long-term safety nets for citizens. However, criticisms arose regarding some programs not reaching all affected populations equally, indicating mixed effectiveness in addressing widespread economic hardship across different demographics.
• Analyze how the New Deal set precedents for future government intervention in economic crises.
  • The New Deal set important precedents for future government intervention by demonstrating that federal action could be used to address economic crises effectively. It established frameworks for social welfare programs and regulatory bodies that continue to influence policy today. The acceptance of a more interventionist approach led to ongoing debates about the appropriate role of government in economic matters, shaping policies during subsequent crises such as the 2008 financial collapse.

Related terms

Social Security Act: A 1935 law that established a system of old-age benefits for workers, unemployment insurance, and aid to families with dependent children.

Civilian Conservation Corps (CCC): A public work relief program that operated from 1933 to 1942, providing jobs for young men on environmental projects.

National Industrial Recovery Act (NIRA): A 1933 law that aimed to boost the economy by establishing fair practices for industries and promoting industrial growth through cooperation between business and government.