Was it necessary for FDR and the federal government to intervene in the Great Depression or should he have let the markets adjust themselves? Are there similarities between what the New Deal...
Was it necessary for FDR and the federal government to intervene in the Great Depression or should he have let the markets adjust themselves?
Are there similarities between what the New Deal attempted to do to restart the economy and what the government is trying today?
Most historians would argue that it was absolutely imperative for the government to intervene in the Great Depression. Even Roosevelt's predecessor, Herbert Hoover, believed that some intervention was necessary; although he also believed that volunteerism and "rugged individualism" was all that was needed. The error of this thinking is made obvious by the throes to which the country sank during the last days of his presidency. In fact, the time between Roosevelt's election and the time he took office in March, 1933 is known as the "interregnum of despair," the worst days of the depression.
Roosevelt's first act to deal with the depression, declaring a bank holiday, gave the country time to catch its breath, and restored confidence in the banking system. When the banks re-opened after the holiday, more money flowed into banks than was withdrawn. This was a complete reversal of previous days when banks failed because of runs. Further, the New Deal's several programs such as the Civilian Conservation Corps, the Works Progress Administration, etc. put people to work. Although it did not end the Depression, it gave people hope, and put the nation on the path to recovery.
There are few similarities between FDR's plans to revive the economy and present plans. FDR's plans involved a number of government instituted programs, two of which are mentioned above. There was no similar government program by either the Bush or Obama administrations; rather there was stimulus of business and tax cuts in hopes of reviving the economy. The only similarity is that both involve massive government spending and both resulted in tremendous federal deficits.