What were the effects of the New Deal?
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We can look at both short-term and long-term effects of the New Deal.
In the short term, the New Deal helped to reduce the severity of the Great Depression. It gave money to the poor and made jobs for many people. It did not end the Depression, but it helped make things better than they had been.
The major long-term effect of the New Deal was to get the government involved in many more aspects of American life. It helped allow the government to do things like providing pensions for retired people (Social Security) and guaranteeing bank deposits (FDIC). These were things the government had never done before.
Coming to office amid the depths of the Great Depression, the newly-elected administration of President Franklin Roosevelt wasted no time devising a strategy for lifting the country out of the economic mire in which it was seemingly trapped. The series of programs that emerged to address the wide-scale unemployment that followed the crash of the stock markets in 1929 were known as the New Deal. The New Deal included a number of large-scale public works projects, many under the rubric of the newly-established Tennessee Valley Authority, that put large numbers of unemployed laborers to work building dams, roads, and other forms of infrastructure. The Civil Works Administration was the federal agency established for the purpose of finding ways to put people back to work, and the Federal Housing Administration was established for the purpose of spurring the labor-intensive home-building industry which would benefit both laborers and those hoping to buy new homes through the program's low-interest loan element. Other programs, including the establishment of the Federal Deposit Insurance Corporation, which guaranteed the savings of individual investors up to a certain limit, and which still exists, was intended to protect families from the devastating effects of another wide-scale banking failure, which had wiped out millions of peoples' savings accounts, were similarly created to address the problems associated with the Great Depression.
The New Deal was instrumental in spurring economic growth and helping to lift the country out of the depths of the depression. Its massive injection of the federal government into the economy was controversial then, and remains controversial today, although most historians agree that the New Deal was an appropriate response to the economic crisis that had come close to destroying the country.
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