What were the effects of the New Deal on American political and economic life?

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The true impact of the New Deal didn't fully take hold until after the end of World War II, but from the start, this new way of understanding the role of the federal government in people's lives led to greater stability, security, and prosperity for the bulk of the American...

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The true impact of the New Deal didn't fully take hold until after the end of World War II, but from the start, this new way of understanding the role of the federal government in people's lives led to greater stability, security, and prosperity for the bulk of the American people. The New Deal operated on the premise that the federal government had a central role in ensuring a better economic life for all Americans.

The New Deal worked at reviving the economy by putting people to work through various federal government programs to build and repair infrastructure. It increased the standard of living of the average person through minimum wage legislation, social security, and federally insured bank deposits and home mortgages.

Economically, the New Deal increased regulations on banks, Wall Street, and businesses in order to insure that another devastating stock market crash would not occur to bring down the economy a second time. These regulations worked until they were rolled back in the late 1990s and early twenty-first century, leading to the devastating collapse in 2008.

Politically, the New Deal was, in fact, truly a new deal for the American people. For the first time, the federal government took on the important role of trying to promote the security and prosperity of the American people. Before that time, aid programs had been the province of private charity and local government initiatives. The federal government felt its chief role was military defense of the nation. Under the New Deal, the federal government shifted its focus to institute sweeping programs to help all Americans. This helped keep the threat of communism at bay.

Politically, too, the New Deal was popular, and a public consensus that the government has an integral role in ensuring the economic welfare of all Americans has endured until this day, though the two major political parties debate how large that role should be.

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The New Deal had significant impacts in both the short and the long term.

In the short term, it helped to reduce the severity of the Great Depression.  It did not end the Depression, but it improved conditions to some degree.  At the same time, it helped make Franklin D. Roosevelt and the Democratic Party much more popular.

In the long term, the major impact of the New Deal was to entwine government and the economy.  This was the beginning of the system we have now in which the government is held responsible for how the economy runs and in which it regulates almost every aspect of the economy.

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