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How successful was the new deal in tackling the problems of unemployment?
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Elementary School Teacher
In terms of attacking the underlying causes of the massive unemployment of the time, it was an enormous success that could be a model for future situations. In terms of actual results, it was minimal.
The massive unemployment of the Great Depression was the result of a vicious cycle started in the 1920s. Business owners and corporations were charging more for their products and services than consumers were earning. When this resulted in a drop in consumer spending, businesses responded to the declining revenue by cutting costs, which only compounded the problem. The New Deal sought to alleviate this problem, but without breeding dependency (a problem with welfare). The Works Progress Administration (WPA) and other programs (e.g. CCC) were workfare, i.e. you had to work to earn your payments, but the payments were redistributions of income from progressive taxes.
In results, the WPA and other workfare programs barely made a dent in the unemployment rate. The principles were good, and it even aimed to make the point to private enterprises that increasing consumer incomes would restore the consumer spending that drove profits. Unfortunately the message fell on deaf ears, and the Government couldn't level a steep enough progressive tax to fully alleviate unemployment without harming businesses that could reduce the demand for such programs.
Posted by tjbrewer on April 20, 2013 at 9:14 PM (Answer #1)
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