How Did The New Deal Improve The Economy

Crixtin Rosario
D03943549
Prof. Coriat
7/30/14
The New Deal America during 1929 to 1933, suffered a huge economic catastrophe known as the Great Depression, due to the stock market crash. Many Americans were driven into poverty, became unemployed, and were without sufficient income. Franklin Roosevelt, decided to establish the New Deal to make economic improvements for Americans to establish financial and social security. The first step in the New Deal was the relief program. The New Deal started with the Civilian Conservation Corps, and the Works Progress Administration to help the unemployed. The CCC was established particularly for jobless single young males between the ages of eighteen and twenty-five. The CCC provided several jobs
in environmental projects such as planting trees, maintaining roads, building bridges, dams, and many more. These men were paid approximately thirty dollars a month. The next relief program was the Works Progress Administration. This program was the most prominent program of the New Deal.
It trained and educated people to learn a new skill and also how to apply those new abilities. The WPA focused on public projects, such as The Federal Art Project. Under this program thousands of posters, prints, sculptures, paintings, drawings, and murals were produced, which were then, in turn, loaned to schools, libraries, galleries, and other institutions (Wilkinson). The WPA gave Americans something to do instead of just sitting around. Although it was a great relief program, it costs the government millions of dollars to fund these relief programs and were shut down in 1943. The next step of the New Deal was the recovery program. This program restored the economy back to where it was before the Great Depression. The first step in the recovery program was the Agricultural Adjustment Act. This act regulated the supply and demand of farm goods. For instance, when farmers had an overproduction of food such as dairy products or crops, the AAA compensated farmers to destroy excess livestock or crops in order to raise market prices. As a result, farmers made easy profits, but consumers faced higher prices for these goods. In addition, many people were against this act because they disagreed with the
AAA policies, and critics would accuse the government of wasting food. The AAA was an attempted recovery program to help farmers, but it had a negative impact with some of society. In 1937, the Supreme Court ruled that the AAA was unconstitutional, but the basic program was rewritten and again passed into law (Ganzel). Furthermore, the National Recovery Act was another recovery program of the New Deal. Its plan was to restore the economy, raise employment and reestablish American businesses. The NRA created several codes for fair competition. The NRA wanted most businesses to participate in the market until the economy was restored, by eliminating destructive competition. The NRA symbolized a poster of a blue eagle with the slogan, “We Do Our Part,” to show society that businesses and employees also supported the NRA. Although some people agreed with the NRA program, there were others who criticized the policies. For instance, the NRA's contemporary critics, [said] that the federal government victimized small business and the consumer when it bowed to big business's avaricious vision of restricted output, higher prices, reduced purchasing power, and scarcity profits (Pennock). Ultimately, The Supreme Court investigated the NRA and declared it unconstitutional. The Public Works Administration was a national act of the New Deal in reaction to the Great Depression. This program offered several jobs to encourage Americans to go back to work. The PWA built schools, public roads, airports, and hospitals. The problem with the PWA was that the national projects costs billions of dollars funded by the government. Due to excessive government spending, the PWA did not succeed in the end. Finally, the third step of the New deal was the reform program.
This program took measures to prevent an economic depression and protect the unemployed. During the 1930s, many banks closed due to the stock market crash. People’s life savings within the banks were wiped out, and an extraordinary amount of Americans did not have the money to survive. This epidemic drastically increased the unemployment rate and drove many Americans into poverty. A quarter of the workforce was unemployed as businesses in every sector of the economy closed their doors (Noll). Therefore, the Federal Deposit Insurance Corporation was established following the Great Depression to guarantee Americans up to two thousand five hundred dollar in case of another bankruptcy. Furthermore, Roosevelt proceeded to push the Fair Labor Standards Act. Its purpose was to regulate work hours, set minimum wages and define work criteria. Roosevelt fought congress to pass laws to stop child labor and set work standards. Taking advantage of child labor in periods of business depression along with decreased earnings and extending the hours for the lowest paid workers will have negative effects on purchasing power (Grossman). After Roosevelt faced congress numerous times, congress finally passed the FLSA in 1938. The FLSA set work guidelines such as a thirty five to forty hours of work a week and a minimum wage of twelve to fifteen dollars. Also, youths under sixteen years old were not allowed to be employed. In
addition, the third reform program was the Social Security Act. During the Great Depression, majority of senior citizens were living in poverty because they could no longer work. Americans believed the elderly should be compensated after working their entire lives. As a result, the SSA was initiated. The SSA deducts a certain percentage from the employee’s paychecks that would be collected for post-retirement living to allow seniors to enjoy retirement starting at the age of 65. The SSA is basically a collected amount of funds to be equally disbursed until death. In summary, the New Deal helped America, but it did not entirely fix the damages from the economic depression. Relief gave Americans a new way of life to get back to work with a sense of pride. Recovery did fix some aspects of economy, but it didn’t alleviate what was left from the Great Depression. Finally, Reform set plans on preventing any economic disaster from happening in the future.