Long Term Effects Of The New Deal

What were the effects of the New Deal?

Asked on by jecho

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pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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We can look at both short-term and long-term effects of the New Deal.

In the short term, the New Deal helped to reduce the severity of the Great Depression.  It gave money to the poor and made jobs for many people.  It did not end the Depression, but it helped make things better than they had been.

The major long-term effect of the New Deal was to get the government involved in many more aspects of American life.  It helped allow the government to do things like providing pensions for retired people (Social Security) and guaranteeing bank deposits (FDIC).  These were things the government had never done before.

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mkoren | Middle School Teacher | (Level 3) Senior Educator

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The New Deal had many effects on our country. The immediate effect was to try to provide relief and jobs to our people. There were many programs that created jobs. The Civil Works Administration and the Public Works Administration are some examples of programs that were created. Farmers were encouraged to cut production by being paid not to plant crops as a result of the Agricultural Adjustment Act. The Home Owners Loan Corporation allowed people with jobs to refinance their mortgage.

There were some reforms made to try to prevent the Great Depression from happening again. The Securities Act regulated the stock market. The Glass-Steagall Act regulated the banking industry and provided insurance for bank accounts. The Federal Deposit Insurance Corporation insures savings accounts.

The New Deal had some long-term effects. Today, people expect the government to be a safety net if things completely collapse. The government can no longer sit back and tell people to wait until good times return. They also expect the government to get involved and try to resolve disputes between powerful groups. The New Deal also created a lasting social program with the Social Security Act. People rely on Social Security when they consider retiring from their jobs.

The New Deal was very important in helping us deal with the effects of the Great Depression. It also has some lasting effects that are important to this day.

kipling2448's profile pic

kipling2448 | (Level 3) Educator Emeritus

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Coming to office amid the depths of the Great Depression, the newly-elected administration of President Franklin Roosevelt wasted no time devising a strategy for lifting the country out of the economic mire in which it was seemingly trapped.  The series of programs that emerged to address the wide-scale unemployment that followed the crash of the stock markets in 1929 were known as the New Deal.  The New Deal included a number of large-scale public works projects, many under the rubric of the newly-established Tennessee Valley Authority, that put large numbers of unemployed laborers to work building dams, roads, and other forms of infrastructure.  The Civil Works Administration was the federal agency established for the purpose of finding ways to put people back to work, and the Federal Housing Administration was established for the purpose of spurring the labor-intensive home-building industry which would benefit both laborers and those hoping to buy new homes through the program's low-interest loan element.  Other programs, including the establishment of the Federal Deposit Insurance Corporation, which guaranteed the savings of individual investors up to a certain limit, and which still exists, was intended to protect families from the devastating effects of another wide-scale banking failure, which had wiped out millions of peoples' savings accounts, were similarly created to address the problems associated with the Great Depression.

The New Deal was instrumental in spurring economic growth and helping to lift the country out of the depths of the depression.  Its massive injection of the federal government into the economy was controversial then, and remains controversial today, although most historians agree that the New Deal was an appropriate response to the economic crisis that had come close to destroying the country.

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