Did the New Deal Work?

By Matthew Bandyk

Posted: April 11, 2008

My article is on the New Deal that was made by President Franklin Roosevelt in 1930s. Even though the article was written in 2008, I feel the ideas on why the author wrote it is still valid for this class. The point the author brought and the overall theme of the article is the idea of government spending to help out the recession that they were in, and if it worked. The recession that the United States was in was Great Depression. The article goes into depth trying to discuss what other economics from today believed about the New Deal. There was research done in 1995 where 51% of the economics agreed that the New Deal did somehow help the economy and the other 49% agree that the New Deal prolonged the depression. We will never know if it did work because of World War II which ended the depression.

This article and the event is important still and needs to be discussed more. It is vital that not every believes the same thing, but yet how we run the United States today is from what President Franklin Roosevelt started. President Roosevelt brought the New Deal as the start social programs that we still is being seen and used today.

The article then goes on to talk about how the gross domestic product fell in 1933 to $635 billion and only to rebound to 1940 to $1 trillion dollars. So it shows that the New Deal slightly improved the economy over the years before the war started. For the unemployment after the 1920s the United States saw the unemployment rise to 24% during 1932, but only slowed to around 17% to 1940. One reason for this what we talked about in class is the idea of business are afraid to employ new people because they do not know if the economy is fixed or just going to fluctuate back down again. It would cost the employer more money than it is worth to hire and then let go again. To fix this unemployment, President Roosevelt formed huge organizations such as the Homeowners Loan Corp., which would employ mass amount of employed people and did.

Another idea came from this plan and was discussed and hailed by economists that were told in this article was the idea of social security. Even know we as students or at least I do not see this is a good idea in the long run, because of how we determine Social Security not being around enough for this generation to be used. It was great for the time in the Great Depression just to help people out who were starving. This would just add to the government spending which affects the United States GDP.

http://money.usnews.com/money/business-economy/articles/2008/04/11/did-the-new-deal-work?PageNr=2