The Benefits of the New Deal

Professor Burton W. Folsom Jr. argues that the high taxes, special-interest spending to certain banks, railroads, farmers and veterans of the New Deal created an anti-free market as well as a poor business environment. Henry Morgenthau Jr. was the secretary of the treasury and a very powerful man, mostly due to his friendship with President Franklin Delano Roosevelt. According to the First Lady, Morgenthau was one of the only men in the world who could tell the President he was wrong and still get away with it. They had a very close relationship and in May 1939, Morgenthau ran into an issue. The Great Depression was beginning to worsen and he felt helpless talking with his fellow Democrats on the House Ways and Means Committee. Unemployment was higher than it has ever been in our country; the national debt was spiraling out of control and social problems began to arise. The life expectancy of Americans was also interrupted during the years of the New Deal. The decline in life expectancy of the New Deal years was not very consistent; however, it was still more of an interruption than the century had seen before. Although times were tough while Roosevelt was President, one of the most recent polls ranks Roosevelt and Lincoln as the greatest presidents in the history of the United States. The question still remains unanswered of what broke the Great Depression. If Roosevelt’s policies and programs of the New Deal did not break the Depression, then what did? Several historians argue that the entry into World War II was critical while others believe that large-scale spending was the solution. Burton W. Folsom Jr. believes that the poor performance of the U.S. economy was one of the key ingredients. Tax policy and special-interest spe... ... middle of paper ... ...eaders and Roosevelt received much of the credit. One of the biggest examples of a policy that helped prevent another depression was the creation of the Federal Deposit Insurance Corporation, or FDIC. This policy prevents investors from running to the bank at the first sign of a collapse and taking their money out, ultimately causing the collapse to occur quicker. The current rate of protection is around $250,000 per account. This means that if you have $150,000 in the bank and that particular branch fails, the government will reimburse you with your $150,000. This makes it much easier and safer for investors to put their money into banks and help boost the economy. The New Deal may have potentially prolonged the Great Depression; however, I believe it was for the better and I think the policies implemented have helped our nation steer away from future depressions.