The Impact Of The New Deal

The New Deal was a radical approach after World War One made for a rough transition from a government controlled economy back to an economy ran by capitalist and a lack of regulation to go with it. The New Deal turned a laissez faire government into a better regulated that was flexible to the needs of the people of all classes. Some of the New Deal’s programs are in effect today, the New Deal also represents that the effectiveness in government handling social, political and economic needs. During the beginning of the great depression the need for the government to stand in was great and a new president was needed to make an impact.

Franklin D. Roosevelt became President 1933 which marks the beginning of a new era for the United States.

Capitalism without regulation ultimately tried to return to pre war conditions of low wages making purchases difficult again. Between 1929 and 1933 manufacturing was reduced by a third due to the low purchasing power of the consumers. President Hoover’s policy of not stepping in and only allowing people to help each other did not improve the situations, until Franklin D. Roosevelt began with the radical New Deal. It began with extreme measures for the government to step in to help its people despite the long trend of not interfering. The New Deal dealt directly with as many parts of society as it could. The banks were one of the most important since banks failed and could not pay back savings. Roosevelt’s 1933 Banking Act and Emergency Banking Act helped to regulate banks and prevent people from continuing to remove funds from banks at an extreme rate to prevent a larger collapse. It also providing a large amount of regulation on bank’s and provided insurance on deposits. This was a positive move for society and the economy, providing security to deposit money again which helped improve the banking economy.

Before World War One decline in prices of food hurt farmers as mechanization replaced jobs and ultimately dropped prices, but during the war farmers were prosperous due to regulated prices preventing supply and demand problems. After the war the New Deal helped regulate prices that had declined again and provide relief for farmers. One act that provided this help was Agricultural Adjustment Act of 1933 which provided steady prices by reducing output by compensating farmers for product they didn’t produce. While this act proved incredibly helpful for farmers it was later considered unconstitutional since the tax generated from it was paid back to the farmers. In 1938 the same act was again passed providing a long term program that is in effect today, with changes the deem constitutional. This is extremely helpful since it provides help with farmers today, without it the economy would be different and farmers would not have the same advantages. Another Act that helped in short term was the Social Security Act, which provided income for the elderly or disabled. This helped provide more jobs by removing the elderly from working and eased the problem of poverty with the elderly. This effectively helped long term by still providing these benefits and reduces the trouble that elderly face, as they can retire without fear of supporting themselves. One of