New Deal Failure

1265 Words6 Pages
The New Deal, created by the 32nd president of the United States Franklin D Roosevelt, was partially successful in solving the problems of the Great Depression. The programs created by the New Deal were able to decrease the unemployment rate. They were also able to create programs that attempted to solve the surplus that farmers experienced. The American people restored their trust in the banks and stock market. Because of the New Deal, problems of the Great Depression were partially solved. The unemployment rate at the height of the Great Depression was at 25%. This means that every one of four people were unemployed. The government programs created by the New Deal brought the unemployment rate down to 14%. The majority of the programs that…show more content…
One major program of the New Deal was the National Industry Recovery Act. This act created codes to set prices, establish minimum wages, and limmit factory shifts. This program was led by the National Recovery Administration. Companies weren’t forced to sign off on these codes, thus they were not forced to follow them. On top of that, those that did sign off on them were loosely administered by the NRA. Because of this, business leaders often didn’t follow the codes. The minimum wages set by the NIRA forced companies to raise their prices for their goods. These codes also favored large corporations rather than small companies. The NRA was ultimately declared unconstitutional by the Supreme Court in…show more content…
Keynesian economics is when the government spends more money during periods of high unemployment. This is exactly what FDR did to drive America towards the end of the Great Depression. The ultimate end of the Great Depression was World War Two, and during that war government spending greatly increased. Throughout the New Deal, government spending was increased. With this, unemployment started to go down. The money given to the American people through these jobs would allow them to buy more consumer goods, thus the companies making more money and paying their workers more. This deficit spending by FDR worked up until he decided to balance the budget. If FDR had decided to continue the deficit spending, America could have exited the Great Depression
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