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The New Deal was needed because the US economy had been damaged so badly by the Great Depression and because people had lost confidence in the future of the economy.
After the onset of the Depression, the US economy crashed badly. Unemployment, for example, rose to somewhere (depending on the estimate) in the range of 25 to 33%. With the economy in this much trouble, drastic action was needed to fix things. Even if the New Deal had not been necessary from an economic point of view, it would have been necessary from a psychological point of view. People had lost so much confidence and faith that only a really bold set of actions would be able to do much to convince them that things could get better.
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