XII. The Legacy (Effects of the New Deal)
A. The New Deal Ends
1. What began to take the focus of the country away from the effects of the Great Depression? What effect did this
have on the economy of the U.S. (and on the Great Depression)?
- the entrance of the U.S. into WWII (because of the bombing of Pearl Harbor) forced the U.S. government
to employ millions of people so that war products could be made (it had no choice but to do this)
- the increased deficit spending of this time period injected tremendous amounts of money into the
economy, which jump-started it and created economic growth
- our entrance into WWII effectively ended the Great Depression for our country
**B. The Significance and Effects of the New Deal**
1. Identify, and summarize main aspects of, the seven (7) effects of the New Deal that are identified and described
on pages 382-383 of the old textbook. Your analysis and explanation MUST BE VERY DETAILED.
a. EXTENSION OF THE POWER OF THE FEDERAL GOVERNMENT
New Deal agencies came to the rescue of banking, industry, and agriculture in the early years of the Depression. While government involvement in private business existed long before Roosevelt, the extent of that involvement increased greatly during the New Deal. Such involvement was not merely extensive; it was permanent. Seven decades after the Depression ended, the government continues to play an important role in the lives of Americans. The Federal Housing Administration (FHA) still insures mortgage loans. The Agricultural Adjustment Act still pays farms subsidies (payments to farmers to grow – or not grow – and raise – or not raise - crops and livestock). The TVA still provides electricity. Bank deposits are still federally insured, and the Securities and Exchange Commission (SEC) still watches over the stock market. The lasting effects of the financial and banking reforms have been especially important, assuring citizens of the long-term stability of the American economy.
b. EXTENSION OF THE POWER OF THE PRESIDENT
FDR was probably the best-loved and most-hated president since Lincoln. Not only his policies but also his forceful style of leadership aroused strong emotions on both sides. Critics, pointing to the Court-packing scheme and other Roosevelt policies, sometimes accused FDR of wanting to be a dictator. Even today he remains a controversial figure.
Without question, Roosevelt believed in an active presidency and did much to broaden the President’s power. Later Presidents continued the trend, helping to create what is often called an “imperial presidency”. Defenders of presidential power have replied that as a large and complex nation, the U.S. cannot afford to be without strong executive leadership.
c. DEFICIT SPENDING
One of FDR’s most controversial actions was using deficit spending, that is, spending more money that the government raises in taxes. FDR was not the first president to fail to balance the budget. He was, however, the first to consistently use deficit spending as a method of stimulating (trying to improve) the economy. This tactic, encouraged by the economist John Maynard Keynes, is called Keynesian economics. By the time FDR left office the national debt was nearly $260 billion. (However, much of this debt reflected wartime spending rather than New Deal programs). Presidents after FDR sometimes tried to balance the budget, but deficit spending has been more typical.
d. FEDERAL SOCIAL PROGRAMS
The New Deal established the welfare state – government based on the view that the state (government) is responsible for the security and needs of the people. The Social Security Act has continued to provide aid to the elderly, the disabled, and the unemployed. Later administrations have used it as a precedent for extending aid to other groups, such as students, the handicapped, and mothers with dependent children. Like FDR, however, later presidents have favored “modified” social welfare programs that do not guarantee complete economic security. Few Social Security recipients can live entirely on their pensions (from Social Security). People who received “unemployment” benefits (checks) eventually have to find work. FDR “modified” welfare approach was meant to help people in their time of need, not make them permanent dependents of the government.
e. GREATER CONCERN FOR WORKERS
The National Labor Relations Act of 1935 gave workers the right to join unions and to bargain with their employers. The Fair Labor Standards Act was another major achievement in labor history. Later administrations built upon these two laws to provide workers with safer workplaces, rights to company pensions (retirement programs), and freedom of racial and sexual discrimination.
f. CONSERVATION GAINS
The New Deal made conservation a permanent part of the political agenda. New Deal programs changed the face of the country, as government workers practices soil conservation, built dams to prevent flooding, and reclaimed the grasslands of the Great Plains. After the 1930’s Americans would never wholly forget that farmlands and forests could not be used without thinking of the future.
g. RENEWAL OF FAITH IN DEMOCRACY
Perhaps most importantly, the New Deal carried the U.S. through a time when the success of democracy itself seemed to be in question. “The only bulwark of continuing liberty,” FDR once declared, “is a government strong enough to protect the interests of the people, and a people strong enough and well enough informed to maintain its sovereign control over its government.” By reviving the faith and strength of the American people, FDR ensured that the U.S. would be strong enough to defend democracy if the need arose. With a world war taking place (WWII) and the survival of freedom itself at stake, the U.S. was ready to play a fateful role in the course of world history.
C. Identify and describe ways that the Great Depression and the policies and programs of the New Deal still affect you
today. Be specific and detailed in your explanation. Your analysis and explanation MUST BE VERY DETAILED.