To what extent was the new deal responsible for the recovery of the American Economy?

The New deal may not have been a complete success, as in part, it failed its main objective to put the U.S back into work and solve the problems caused by the depression and it was the re-armament program which brought America back into work, however many of the new deal programs had a very successful impact on trying to review and stabilise the ever more failing American economy.

In the first 100 days, Roosevelt showing his will to undertake immediate action in trying to revive the American economy and to look after the well being of his people. He introduced the emergency banking relief act, which closed all banks for four days in order to quieten things down and then only allowed the banks with sufficiently hopeful funds to re-open. Banks were then promptly banned from investing in the stock market. By doing this, he restored confidence among the American people in the banking system, something fundamental for every capitalistic economy. Now people were secure that they could put their money into banks, without losing their life time savings. He also introduced the Federal Emergency Relief Agency, which went against the old attitude of "rugged individualism" and instead provided $500,000,000 emergency aid to the poorest victims of the depression.

Although many may disagree with whether the New Deal truly was a success, none can disagree, that his use of "fireside chats", through which he communicated to the public, what was being done, restored lost confidence and gave people hope that something could be done and that was probably one of the greatest achievements of the new deal.

Further success included how he tried to deal with agriculture, an industry which had been in depression since the 20's. Through the new deal, he managed to raise prices and stop over-production. Also, the CCC, which managed to give up to 3m young Americans (mainly men, only 8,000 women) the chance to work and get paid and possibly the most successful aspect of the new deal was the TVA. People living in the Tennessee River Valley, were living in one of the most depressed areas in the country. Agriculture was hit by frequent floods, causing serious soil erosion and crop failure, only 2% of farms were solved by electricity and 50% of its people were Dependant on government relief for survival. By creating damns in the area, the land could be irrigated and farmed and hydro-electricity could also be produced to serve and area previously so poor in it. This further attracted industry such as paper-making and aluminium smelting, further re-generating the area. There were also efforts to improve workers rights and conditions, by allowing all workers to join a trade union and by use of the Blue Eagle, which encouraged companies to increase working conditions and wages. He also introduced measures to increase social justice, such as introducing the first welfare system which helped the old, sick and unemployed, a landmark never previously achieved. There were also many major building and refurbishment projects, which improved and created hospitals, schools, airports, parks and provided employment to several unemployed. He was also fairly successful in bringing down unemployment 40% from when the took office in 1933 over the next 4 years. So it is clear, that the new deal was incredibly successful in restoring confidence amongst the American public, cutting unemployment and increasing the standard of living, but did it fulfill its main objective? did solve the problems of unemployment and poverty and bring the US? back into work?The Republican pointed out, that the new deal policies, were trying to solve the unemployment problems by spending large amounts of money the government did not have and was only giving the unemployment problem by turning millions of citizens into government employees. Further more, Roosevelt who ultimately agreed with the philosophy of balancing the budget, when he thought the economy was recovering well (in 1937), he decided to cut the amount spent on the New Deal programs. The loss of demand created by the government, caused industrial production to be cut by a 1/3 and unemployment to rise by 3m, bringing the economy back into depression. This could be used to argue that the New Deal failed to tackle the structural problems of the American Economy, if failed to "solve" the problem of unemployment, as without a constant cash injection the economy returned to depression, however it did manage to cut and ease the problems caused and the amount of people in unemployed, but at the cost of bringing the country in debt. However, it must also be noted that even at its peak in 1937, industry was still 25% less productive and unemployment was still at 14.3% instead of 3.2% (a multiple of 4) as it was in 1929 before the wall street crash, so it was at most a partial and certainly not a full recovery. Also, although the New Deal, helped and focused mainly on the people in need, it made little progress towards the improvement in civil rights for blacks and equality for women. Although 30% of black families received emergency relief, no new deal laws specifically helped black people, also women were still paid less than men for the same work. Roosevelt's majority depended strongly upon the votes of white southerner voters to get his laws through, many of whom were strongly racist, as we know from out own knowledge in the 20's, where Klu Klux Klan membership rose to many millions, with strong holds of support based in the south.

I thus conclude, that the New Deal was very successful, as it managed to improve the lives of many millions and curb the number of unemployed and soothe the country of the problems the depression was causing, it also re-generated areas, created and re-furbished useful facilities, introduced social justice measures such as welfare reforms and workers rights, but most importantly, it brought back confidence to the people and saved the system of democracy and capitalism, when revolution of both Nazi and Communism were seeming ever more viable options. There is also no doubt, that the New Deal brought down unemployment significantly from when Roosevelt took over in 1933, when it stood at 24.9%, to the peak of new deal works in 1936, where it was only 14.3%. However it did certainly not fulfill the objective of solving the unemployment issues and bringing the U.S.A back to a state of wealth and employment of pre 1929, when the unemployment rate was on 3.2%. It was Re-armement program, between 1939 and 1944 that brought down and once and for all solved American's unemployment and depression problems, by which the unemployment was only 1.2%.

(Notes made by booklet given in class, emplyoment comparative figures used from www.bls.gov/cps/cpsaat1.pdf national website of recorded U.S. Employment, own knowledge, Wikipedia, etc...)