How has the role of the federal goverment changed as a result of the New Deal?
As a result of the New Deal, the role of the federal government has expanded tremendously. Before the New Deal, Americans generally did not expect the federal government to do much for them. Now, we expect a great deal from it. Let us look at three examples of this.
- We expect the government to make sure we do not lose our money if our banks fail. This is because the FDIC was created during the New Deal.
- We expect the government to provide us with jobs when the economy is bad. During the Depression, the government did this directly with programs like the WPA. Nowadays, we expect the government to do this indirectly through fiscal stimulus packages.
- We expect the government to provide for us during our retirements. This is because of the creation of the Social Security program.
Expectations like these have also led to general expectations that it is the responsibility of the government to ensure that our economy works smoothly and that we are protected as much as possible from negative economic outcomes.