Discussion Topic
Government responses to economic crises like the Great Depression
Summary:
During the Great Depression, governments responded with various measures to stabilize their economies. In the United States, President Franklin D. Roosevelt implemented the New Deal, which included public work programs, financial reforms, and regulations to stimulate economic recovery. Other countries also adopted similar interventionist policies, increasing government spending and enacting social welfare programs to mitigate the crisis's impact.
How did the government respond to the Great Depression?
When looking at our government’s response to the Great Depression, we need to look at what President Hoover and President Roosevelt did. When the Great Depression began, the prevailing attitude of President Hoover was to take a laissez-faire approach. This meant the government would not do much to deal with the Great Depression. President Hoover worked with businesses to voluntarily do some things. Businesses initially agreed to keep factories open and to not cut wages. However, businesses weren’t able to do this over the long run. The depression became worse. Eventually, President Hoover had the government take direct action. The National Credit Corporation provided money to help troubled banks make loans. The Reconstruction Finance Corporation gave loans to banks, farmers, and railroads. The Emergency Relief and Construction Act provided help to those who were unemployed. However, these actions weren’t enough to end the Great Depression.
President Roosevelt believed from the...
Unlock
This Answer NowStart your 48-hour free trial and get ahead in class. Boost your grades with access to expert answers and top-tier study guides. Thousands of students are already mastering their assignments—don't miss out. Cancel anytime.
Already a member? Log in here.
beginning that the federal government must be actively involved. There were a series of programs developed to provide relief, recovery, and reform to our economy. There were several job creation programs that were developed. These included the Civilian Conservation Corps, the Civil Works Administration, and the Public Works Administration. Laws were passed to control the financial industry. The Securities Act and the Glass-Steagall Act regulated the financial industries. The National Industrial Recovery Act had businesses, workers, and the government working together to deal with the effects of the Great Depression. Codes of fair practices were established that workers and businesses agreed to follow. The Agricultural Adjustment Act was designed to help farmers. Farmers were paid not to grow crops.
President Hoover and President Roosevelt had very different views about how the government should deal with the impact of the Great Depression. President Hoover wanted a limited government role while President Roosevelt wanted a very active government role.
What should be the government's response to an economic crisis like the Great Depression?
The answer to this question is largely an opinion response and would depend on the one's own perspective of the role of government. The Great Depression was probably the world's greatest economic collapse ever. Two presidents in the United States approached the crisis from different perspectives. Historians still cannot come to a conclusion as to the effectiveness of either response.
Herbert Hoover believed in a limited government approach in response to the Great Depression. Hoover believed that the economy would fix itself if the government stayed out of its way. He also felt that charities and churches should provide security and comfort for those that suffered in the economic collapse.
Franklin D. Roosevelt, on the other hand, believed that a strong government response was needed to fix the Great Depression. He ordered government programs that were to oversee the economy, provide relief for the jobless, and supply jobs for those struggling to make ends meet.
Historians widely acknowledge the role of World War II in ending the Great Depression in the United States. This was a conflict, however, that plunged the United States into debt. It would be foolhardy to propose that any country should utilize war as a means for correcting the economy.
The best response for handling an economic crisis is probably to prevent the crisis from occurring in the first place. This can, and has been done through manipulation of the interest rates and through taxation policies.
References