To what extent did FDR’s New Deal end the Depression?
As the concluding lesson on the New Deal it is necessary to step
back and evaluate the impact of the New Deal. After all, the
government spent billions of dollars on the New Deal; was it worth
it? Did the New Deal achieve it’s desired goals? Did it end the
depression? These are the questions we must ask.
Economists and historians still argue
about just when the depression ended. Some can show charts and graphs
to prove it was over by 1937, when substantial gains had been made.
Business activity had been cut almost in half. Roosevelt, like Hoover
and most other believed that balancing the budget was important. The
policies of the first and second New Deals had resulted in enormous
government deficits. While this was a price Roosevelt was willing to
pay, as soon as signs of improvement appeared in 1937 Roosevelt
reduced government spending and programs. As a result another
depression (or a continuation of the first) struck in 1937 and 1938.
Unemployment rose from 6 million to 10 million and the economy
slumped again.
Pointing to the economic problems
after 1937, some economists argue that the depression ended in 1940
when business activity again reached the level of early 1937. Still,
after seven years of heavy government spending – 20 billion dollars
worth – and the creation of an enormous federal bureaucracy that
supervised the new programs, millions remained unemployed.
Considering these facts, other
economists feel that the depression did not really end until World
War II. Only in 1942, with millions of Americans in uniform and many
more in factories that produced war materials, did massive
unemployment end.
What of Roosevelt himself? Perhaps he
did not end the depression. Even so, his years in the White House
were so important that his record and his personality remain
controversial. For many he was a great leader. He helped millions of
needy people. He revolutionized the role of government. His measures
pulled the nation out of the worst of the depression and night have
finished the job if World War II had not occurred. He provided hope
to the hopeless, help to the helpless and courage to a nation
desperate for leadership. In the chilling atmosphere of fear that
gripped the nation before Roosevelt’s first term people seemed eager
to follow any leader who promised action and an end to suffering. At
a time when dictators around the world were persuading the masses to
try fascism, Roosevelt tried to control the abuses of capitalism
while preserving the American democratic system. By a combination of
relief, recovery and reform, Roosevelt may have prevented a
revolution.
Whether FDR did too much or too
little, he changed the ways in which Americans viewed their nation.
The country had at last accepted the fact that the old theories of
laissez faire no longer worked in a modern industrial society men,
women and children might starve for lack of work, not unwillingness
to work.
In the decades since the New Deal
American politicians continue to argue over how much or how little
the government should regulate the economy and aid the needy but
neither side argues that the federal government should do
nothing. Americans have accepted the fact that their
national government must play a positive and active role in
protecting the equality of opportunity and freedom that they called
the American Dream.