How did the New Deal change the role of the government?

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pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The New Deal changed the role of government completely.  Before the New Deal, government had essentially no role in steering the economy or in providing for the people.  After the New Deal, the government has come to play a huge role in both of these things.

Before the New Deal, the government was expected to be more or less laissez-faire.  It was supposed to just stay out of the way and let the economy rise or fall "naturally."  If people were too old to work, they needed to rely on family.  If a bank failed, its depositors were out of luck.  The New Deal changed all of that.

Since the New Deal, the government has started to take care of us.  It provides Social Security and Medicare for the elderly.  It runs the FDIC to insure our bank deposits.  It lowers taxes and increases spending and does other things like that when the economy goes into a recession.

Because of the New Deal, the government has taken a huge role in the economy.  This is something that simply was not the case before the New Deal.

akannan's profile pic

Ashley Kannan | Middle School Teacher | (Level 3) Distinguished Educator

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The role of government during FDR's New Deal was an expansive one.  President Roosevelt understood government's role as one to provide relief, recovery, and reform to the nation's economic institutions that had failed after years of governmental non- intervention.  Roosevelt saw government differently.  As opposed to a force whose presence was largely absent from business and economic affairs, the New Deal saw government as an agent of action.  Roosevelt understood that the stagnant nature of the American economy featured so much inertia that government had to be the source of all action, initiating paths where job creation and growth could be evident.  It was in this light that the New Deal's alphabet soup of initiatives along with broadened executive power enabled Roosevelt to use government as a source of solutions towards people's power.