How did the New Deal fix the Great Depression?

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kipling2448 | (Level 3) Educator Emeritus

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The aggregate effect of the myriad New Deal programs implemented during the 1930s during the presidency of Franklin D. Roosevelt was to help lift the United States out of the depths of the Great Depression. Such programs as the establishment of the Civilian Conservation Corps and the Civil Works Administration, both of which were designed to decrease the ranks of the unemployed, the creation of the Federal Deposit Insurance Corporation, which was instrumental in reestablishing public confidence in the disgraced banking sector by protecting bank deposits up to a certain limit, creation of the Federal Housing Administration, which helped financially destitute families attain mortgages that, in turn, helped laborers find work in the housing construction industry, and establishment of the Tennessee Valley Authority, which helped the particularly hard-hit Tennessee Valley region develop energy sources while, once again, putting unemployed laborers back to work, all helped to bring about the end of the Great Depression. While the country's mobilization for war against Japan and Germany was a major factor in ending the depression, the New Deal programs are appropriately credited with revitalizing the nation's economy. In addition, passage of the Social Security Act in 1935 helped fundamentally transform the way the nation cares for its elderly -- a longer-term development not directly connected to the nation's recovery from the Great Depression but a program designed to ensure the financial devastation that depression imposed upon the nation's retirees would similarly affect future generations.

The various public works programs associated with the New Deal were instrumental in putting millions of Americans back to work, while providing a social welfare net to protect the public against future economic downturns of equal severity. 

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caroline326's profile pic

caroline326 | eNotes Newbie

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Franklin D. Roosevelt developed the New Deal in order to fix the damage caused by the Great Depression.  FDR was a progressivist and an optimist.  He believed that the government can and should help you directly.

The New Deal had 3 key ideas:

  1. Relief for the destitute
  2. Foster economic recovery of farms and businesses
  3. Reform the federal governments role in the federal economy

The New Deal can actually be broken down into two phases. Phase one being a focus on relief and recovery and phase two being a focus on security.

Some of the most important acts implemented by the New Deal and their impact are as follows:

  • NRA: National Recovery Act - this act work =ed with business leaders to establish standards for prices, outputs, and working conditions
  • AAA: Agricultural Adjustment Act - The goal was to decrease supply and demand, an because of this sharecroppers and farmers will get fired.
  • TVA: Tennessee Valley Authority - provided electricity to areas that previously didn't have it, this meant that the government was competing with private companies.
  • FHA: Federal Housing Administration - this insured millions of mortgages and built low-rent housing, but it only insured segregated communities.
  • WPA:Works Progress Administration -  employed people to work on infrastructure
  • Wagner Act - gave people the right to unionize and choose their organization, made firing and blacklisting union organizers illegal, and assigned National Labor Relation Board to overseas elections.
  • Social Security Act - this act was not directly connected to the nation's recovery, but would prove to be very important as well as nearly impossible to push out. (Hence why it is still an Act today.)
bernar11's profile pic

bernar11 | High School Teacher | In Training Educator

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I think this truly is a personal opinion question...  The New Deal did do a significant amount to assist Americans during a tremendously difficult time.  Programs such as the CCC (Civilian Conservation Corp) and WPA (Works Progress Administration) assisted Americans in finding work for a specific skill set.  The CCC assisted young men between 18-25 working outdoors.  Many of the men sent their paychecks back home to assist their families.  The WPA assisted workers with a specific skill set.  Many of the contributions of these two groups can still be seen today (e.g. restoration of historic parks, etc).

Other New Deal Programs, such as the Social Security Act and Securities and Exchange Commission still exist today indicating the tremendous need and their value.

However, many saw the New Deal as a giant experiment that had way too many programs and didn't take the time to see which worked and which didn't.  Many critics thought the government was taking the proper time and consideration in figuring out which programs should do what.  Again...this is all interpretation...

In addition, some critics felt as though the New Deal wasn't doing enough, where as others felt it was doing too much (an argument that people still have today about currently government programs and politicians).

Overall, World War II is truly what brings America out of the depression.  Certainly the New Deal Programs did assist, but WWII provided a tremendous  amount of jobs for people in need.

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