How did F.D.R.’s New Deal propose to fix the problems of the Great Depression?

1 Answer

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

The New Deal proposed to fix the problems of the Great Depression in a number of ways.  The most important of these were in two prongs.

On the one hand, the New Deal proposed to end overproduction.  It was going to pay farmers to produce less (AAA).  It was going to get businesses to reduce their production as well (NIRA).  This would raise the prices of goods and allow firms to make more money and pay their workers better.

On the other hand, the New Deal proposed to increase demand from consumers.  It proposed to put more money in the hands of the people by giving them relief payments or by giving them jobs.  This money would be used to buy goods and, thereby, give more people jobs making those goods.

In these ways, the New Deal was going to reduce the unemployment that made the Depression so hard for so many people.