The New Deal

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What are the successes and failures of the New Deal?

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The New Deal can be considered a success in that its reforms prevented future economic depressions. It also provided important temporary relief to Americans in the 1930s that kept millions from experiencing total ruin. Its failures were that it did not end the Great Depression. Several of its laws and programs were struck down by the Supreme Court. It also failed to help minorities and bring unemployment to acceptable levels.

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The Roosevelt Administration's and Congress's response to the Great Depression was not without controversy. The New Deal succeeded in a number of ways, but that success was limited.

A major goal of the New Deal was to prevent future financial disasters. While there have been several recessions in the last century, the country has never faced a depression like the one of the 1930s. This is largely thanks to New Deal reforms which are still in place. This includes the FDIC, Social Security, and FCIC. A number of banking and stock market reforms were passed to prevent the risky practices that caused the Depression in the first place. Some even blame the recession of 2008 on the 1999 repeal of the Glass-Steagall Act of 1933. In the short-run, the New Deal succeeded in proving jobs for the millions of newly unemployed. The CCC, TVA, CWA, and other work programs provided wages for many Americans who would otherwise have been without work. This, in turn, pumped more money back into the floundering economy. Welfare programs were also instituted to provide immediate relief to some of the most vulnerable Americans.

Despite all this, the New Deal can be seen as a failure in many ways. For one thing, it did not end the Great Depression. In fact, unemployment rates were about 15 percent at the end of the Great Depression. It would take wartime spending in the 1940s bring the country out of the Great Depression. Furthermore, not all relief reached every American. For instance, the Agricultural Adjustment Act helped landowning farmers, but it did nothing for the many sharecroppers and tenant farmers, who were primarily African American. Parts of the New Deal were even struck down in the courts. For instance, Schecter Poultry Corp v US resulted in the invalidation of the National Industrial Recovery Act because it was found unconstitutional.

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There were many successes for the New Deal. The Tennessee Valley Authority (TVA) brought power and flood control to many in the South. Social Security continues to be a system that allows people to retire, thus giving people money in their later years, as well as freeing jobs for younger workers. The Agricultural Adjustment Act set price floors for farmers and encouraged conservation practices in the hopes of preventing another Dust Bowl. Banking reform measures such as the FDIC meant that the government insured bank deposits, thus stabilizing the national banking system. Perhaps the greatest legacy of the New Deal was that the government did not undergo a revolution such as what happened in Russia, Germany, and Italy.

There were many failures in the New Deal as well. Conservatives claimed that it placed the government in a prominent place in people's lives, thus opening the door for people to depend on the federal government. Some measures of the New Deal were struck down as unconstitutional. Government spending and debt grew, and there is some talk in today's United States about the solvency of the Social Security system. Perhaps the greatest failure of all was that the New Deal did not actually end the Depression. Unemployment stayed consistently above ten percent during the decade prior to WWII. It would take WWII and the national mobilization needed to fight the war in order to finally end the Great Depression.

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The New Deal ameliorated the worst effects of the Great Depression and helped the country get back on its feet, albeit slowly. FDR's swift action saved the banking system from imminent collapse; the establishment of Social Security gave peace of mind to seniors who'd previously faced the prospect of poverty in retirement; and federal agencies such as the TVA brought electricity to remote rural communities, while the WPA gave the dignity of work to millions, many of whom thought they'd never work again.

Inevitably, however, there were failures in such a large, ambitious policy. For one thing, the New Deal never succeeded in tackling the biggest economic problem in the United States at that timeā€”the scourge of mass unemployment. To some extent, FDR was still quite conservative in his economic thinking, certainly way too conservative for his most radical advisers' liking. This meant that insufficient resources were allocated to the various New Deal projects as FDR always believed that private business would pick up the slack and start investing again to create new jobs. This didn't happen, and levels of unemployment remained stubbornly high throughout the period of the New Deal. It wasn't until America's entry into World War 2 that the goal of full employment was finally reached.

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The avowed purposes of the New Deal were Relief, Recovery and Reform. Among its successes were the institution of Social Security, the creation of the Federal Deposit Insurance Corporation, as well as the Tennessee Valley Authority, and restoration of confidence in the banking system. It gave people hope at a time when there was little, and gave people work at a time when it was most needed. Minimum standards for labor and public welfare were established; and middle class families were helped to keep their homes, savings and farms. Additionally, the government assumed responsibility for insuring the nations economic and social stability.

The New Deal did not end the Great Depression; it only provided relief during the worst days of that dark time. Several of its programs, including the Agricultural Adjustment Act and the National Recovery Act were declared unconstitutional by a very unfriendly Supreme Court.  Additionally, the institution of Keynesian economic policies upset the federal budget and greatly increased the federal debt. Finally, the New Deal did little for minorities. Fearful of offending Southern Democrats, Franklin Roosevelt segregated most New Deal Programs and exempted domestic help from the Social Security program.

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What were the achievements and failures of the New Deal?

There are at least two major achievements of the New Deal.  First, it helped to reduce the severity of the Depression.  Unemployment dropped after the New Deal began.  More people who were unemployed got assistance to make their lives less harsh.  Second, it helped set up a system that would improve the American economy in the long run.  It did this through such things as Social Security and the Tennessee Valley Authority.

However, the New Deal was not a complete success.  Most notably, it failed to end the Depression.  The US economy did not return to full strength until the start of WWII in Europe led to more production in the US.

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