The Great Depression

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How did the role of the federal government change during the Great Depression?

The role of the federal government changed during the Great Depression in that the federal government began to regulate the economy and assist struggling citizens. Prior to this, people in need would have looked to local governments or charities and churches, but through the creation of various programs and new laws, the federal government began to engage with citizens' needs more directly.

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The New Deal that emerged during the Great Depression marked a profound shift in the role of the federal government in domestic policy. Up until that time, federal government spending was primarily directed towards the military. What little domestic welfare existed put almost entirely in the hands of the states and private charity.

The Great Depression caused a severe financial collapse. The magnitude of the problems—high unemployment, bank failures, homelessness, hunger, and widespread poverty, to name a few—utterly overwhelmed the resources of the individual states and private charity.

At this point, to save capitalism, the federal government under Franklin Delano Roosevelt intervened with a myriad of programs to help people. These included the government hiring of the unemployed through programs such as the Civilian Conservation Corps and the Work Project Administration. The FDR administration fought for and passed the Social Security Act, minimum wage laws, the forty hour work week, federal guarantees for bank deposits so that individuals would not lose their life savings in another stock market crash, and a myriad of other programs in which the federal government redefined its role as including safeguarding and promoting the economic welfare of the US citizen. The New Deal was wildly popular and delivered FDR a landslide reelection.

The lives that almost all of us take for granted today, in which we have the guarantee that the federal government will minimally safeguard our well being, began in the Great Depression.

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The beginning of the twentieth century saw a major reform movement sweep the United States. The spirit of activism during this time illustrated the way government can improve the daily lives of Americans. This spirit of change was interrupted by American entrance in World War I. The example of legislative reform and presidential leadership of the Progressive Movement was needed to fix the economy of the 1930s.

Traditionally, the federal government did not interfere with the operations of big business, and churches or charities were expected to help the needy and ill in the United States. Newly elected president Franklin D. Roosevelt was not content to watch as Americans suffered in poverty during the 1930s. Roosevelt was able to pass an aggressive reform system through Congress that he felt would impact the struggling economy. The policy was aggressive enough that some of his programs were debated in the Supreme Court.

Historians cannot agree on the effectiveness of the New Deal on the struggling economy. What is almost unanimously acknowledged is how it changed the role of the federal government. Most Americans now expect the federal government to regulate the economy, provide for those that struggle, and basically be engaged in the needs of its citizens. Before the New Deal, citizens looked to local governments to assist in times of need. After the New Deal, many look to Washington.

There are many examples of government programs that would not exist if it were not for the precedent set by the New Deal. Programs like college assistance, veterans benefits, Medicare, Medicaid,...

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and government investments in arts and sciences are all great examples.

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There are many historians who view the New Deal policies of President Franklin D. Roosevelt as the beginning of the social welfare system of the Federal Government. During the Great Depression, there were many men who had no jobs; consequently, their families suffered deprivation and hunger. The New Deal programs were a series of domestic programs such as the Federal Emergency Relief Administration, which provided $500 million for state and city relief operations, and the Civil Works Administration, which provided localities funds to operate "make-work" jobs, jobs created to give men something to do so they could receive pay.

In the Second New Deal of 1935-1938, the Wagner Act, which promoted labor unions, was passed. The Works Progress Administration (WPA) was also begun; this became the largest employer in the nation. To protect citizens from losing their savings because of a "run," or other circumstances, the Federal Deposit Insurance Corporations (FDIC) was formed. In addition, the Federal Housing (FHA) Administration was begun, and the Tennessee Valley Authority (TVA), which employed thousands and provided water to many, was initiated. Also, the Social Security System was begun. Another institution was the Securities and Exchange Commission (SEC), whose duty is to provide protection to investors; maintain orderly, fair, and efficient markets; and enable capital formation. With the exception of the WPA, these new elements of the Roosevelt government yet operate today. So, the federal government was greatly expanded during the Depression, making great efforts to help the local governments and its citizenry. Ironically, Roosevelt was criticized by conservatives and liberals alike. On the conservative side, people felt that the government was interfering in what should be laissez-faire competition and not a government-controlled economy; on the other side, people felt the government was not doing enough to help people.

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During the Great Depression, the role of the federal government changed tremendously.  Before the Depression hit, the federal government did little or nothing to help people financially.  This was not seen as something the government ought to do.  With the Depression came a change in this perception.  President Roosevelt's New Deal made government responsible for helping people in many ways.  These ways ranged from guaranteeing that they would not lose money they had deposited in banks (FDIC) to ensuring that they would have money to live on after they retired (Social Security).  In general, the New Deal brought on a new role for government, one in which the government did a great deal more to help individuals financially.

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How has the role of the federal government in social policy action changed since the onset of the Great Depression?

The role of the federal government has changed significantly since the Great Depression began. Prior to the Great Depression, the prevailing attitude was one of laissez-faire. The belief was that the government should have a very limited role in helping people who needed help.

Once the Great Depression began, people looked to the federal government for help when times became rough. The Great Depression was so severe and negatively impacted so many Americans, that people shifted their views about the role of the federal government. Many Americans faced desperate conditions as many people lost their jobs and/or their savings. They turned to the government for relief. The federal government developed relief programs in the form of job programs, such as the Civilian Conservation Corps and Civil Works Administration. They also looked to the government to reform banking and investment practices so that it would be more difficult for another financial collapse to occur. The Glass-Steagall Act and the Securities Act were passed. The government also developed programs to help people as they became older. The establishment of the Social Security Act provided help for people when they retired.

In the 1960s, the Great Society program of President Johnson was designed to help people who needed help. Medicare and Medicaid are programs providing health insurance to the elderly and to the poor. The Head Start program helped disadvantaged kids get a chance to start school early.

Today, people rely on these social programs. Any discussion about changing Medicare, Medicaid, and/or Social Security is often met with stiff opposition. The belief that our government should act as a safety net for those in need remains strong today.

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