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How did Franklin Delano Roosevelt deal with the Great Depression? Did his response stimulate the economy?
Asked on March 10, 2010 at 2:04 PM by loola555
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brettd's profile pic
brettd | High School Teacher | (Level 2) Educator Emeritus
Posted on March 10, 2010 at 3:35 PM
FDR was a fantastic politician who related well to the people of America in a difficult economic time. But it's important to remember the New Deal was not his idea - the plan was actually devised by his brain trust, a group of economic advisers, businessmen, and industry leaders who knew how the economy worked. FDR labeled the plan and sold it to Congress and the public.
The New Deal concentrated on three areas: Relief, which provided jobs and food aid to those most in need by 1933; Recovery, which preserved the major industries and economic sectors we would need to survive the Depression and rebuild the economy later (banking, agriculture, housing, etc.); and Reform, to change the laws and regulate the economy so that future Depressions could be prevented.
Spending government money to do these things is called "Keynesian economics" after George Maynard Keynes, a member of the Brain Trust. It worked, but it was short term, and only helped the economy as long as the government kept spending.
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pohnpei397's profile pic
pohnpei397 | College Teacher | (Level 3) Distinguished Educator
Posted on March 10, 2010 at 2:11 PM
Franklin Delano Roosevelt dealt with the Great Depression by implementing a whole package of initiatives that came to be known as the New Deal.
The New Deal included programs for all sorts of things. There were programs to give relief to people put out of work by the Depression and to try to end some of the conditions (like excess agricultural production) that started the Depression. There were reforms to prevent another Depression from happening.
The programs did stimulate the economy -- the economy did improve. However, they did not manage to end the Depression. The Depression only ended when the US started to gear up for WWII.
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geosc's profile pic
geosc | College Teacher | (Level 3) Assistant Educator
Posted on March 10, 2010 at 11:59 PM
Depressions are not uncommon. Previous to the Great Depression, there were depressions in 1819-20, 1839-43, 1857-60, 1873-78, 1893-97, and 1920-21. America recovered from the depression at the end of World War I in less than two years. Those depressions were caused by government policies that created easy money and credit. Business men took this easy money and credit and spent it on unwise developments and bad investments. When these began to collapse, depression ensued. As soon as depression weeded out the badly managed companies, prosperity returned.
