Help was the immediate effort to help the third of the population most affected by depression. The aid was also intended to temporarily help needy and unemployed Americans. Local and state budgets were slashed due to declining tax revenues, but New Deal aid programs were used not only to hire the unemployed, but also to build the necessary schools, municipal buildings, waterworks, sewers, roads, and parks to local specifications. As regular Army and Navy budgets were squeezed, Roosevelt juggled aid money to meet their supposed needs. All CCC camps were run by army officers whose salaries came from the aid budget. The PWA has built numerous warships, including two aircraft carriers; the money came from the PWA agency. PWA also built fighter jets, while the WPA built military bases and airfields. [48] The Economy Act, drafted by Budget Director Lewis Williams Douglas, was passed on March 15, 1933. The bill proposed to balance the “regular” (non-emergency) federal budget by cutting salaries for government employees and reducing veterans` pensions by fifteen percent. He saved $500 million a year and assured deficit hawks like Douglas that the new president was fiscally conservative. Roosevelt argued that there were two budgets: the “regular” federal budget, which he balanced; and the emergency budget needed to overcome depression.
It was temporarily unbalanced. [31] The first New Deal (1933-1934) addressed the urgent banking crises caused by the Emergency Banking Act and the Banking Act of 1933. The Federal Emergency Relief Administration (FERA) provided $500 million ($9.88 billion today) for state and city relief efforts, while the short-lived CWA gave residents money to conduct fictitious work projects in 1933-1934. [5] The Securities Act of 1933 was enacted to prevent a repeated stock market crash. The controversial work of the National Recovery Administration (NRA) was also part of the First New Deal. By 1939, the New Deal had had its day. In the short term, New Deal programs have helped improve the lives of people suffering from depression events. In the long run, the New Deal programs set a precedent for the federal government to play a key role in the country`s economic and social affairs. “Most of the evidence deteriorated in the summer of 1932, which can be described economically and psychologically as the low point of the depression.” [238] Economic indicators show that the U.S. economy bottomed out from the summer of 1932 to February 1933 and then began to recover until the recession of 1937-1938. Thus, the Federal Reserve`s index of industrial production reached its lowest level of 52.8 on July 1, 1932 and remained virtually unchanged at 54.3 on March 1, 1933, but reached 85.5 on July 1, 1933 (with 1935-39 = 100 and for comparison 2005 = 1,342).
[239] During Roosevelt`s 12 years in power, the economy recorded average annual GDP growth of 8.5%,[240] the highest growth rate in the history of an industrialized country,[241] but the recovery was slow, and in 1939 gross domestic product (GDP) per adult was still 27% below trend. [196] When Roosevelt accepted the Democratic nomination for president in 1932, he promised “a new deal for the American people,” saying,[21][22] Since 1933, politicians and pundits have often called for a “New Deal” with respect to an object, that is, they have called for an entirely new and large-scale approach to a project. As Arthur A. Ekirch Jr. (1971) has shown, the New Deal stimulated utopianism in American political and social thought on a variety of issues. In Canada, Conservative Prime Minister Richard B. Bennett proposed a “New Deal” on regulation, taxation and social security in 1935, which was a copy of the American program, but Bennett`s proposals were not implemented and he was defeated in his re-election in October 1935. In line with the increasing use of American political phraseology in Britain, Tony Blair`s Labour government has referred to some of its employment programmes as a “New Deal,” as opposed to the Conservative Party`s promise of the “British dream.” The “second” New Deal in 1935 introduced perhaps the program`s most important and enduring legacy: government-sponsored pension plans in the form of Social Security. It has also increased employment in the public sector (Administration of the Progress of Works) and minimum wages (Fair Labour Standards Act).
The depression had devastated the nation. When Roosevelt was sworn in at noon on March 4, 1933, all state governors had approved statutory holidays or restricted withdrawals — many Americans had little or no access to their bank accounts. [15] [16] Farm income had fallen by more than 50% since 1929. An estimated 844,000 non-farm mortgages were foreclosed between 1930 and 1933, out of a total of five million. [17] Politicians and business leaders feared revolution and anarchy. Joseph P. Kennedy Sr., who remained wealthy during the Depression, said years later, “I felt and said at that time that I would be willing to part with half of what I had if I could be sure to keep the other half under law and order.” [18] This “short-packing” proved unnecessary – shortly after learning of the plan, conservative judges began voting to keep the New Deal plans going ahead – but the episode inflicted great public relations damage on the government and gave ammunition to many of the president`s opponents in Congress. The programs focused on what historians call the “3Rs”: helping the unemployed and poor, recovering the economy to normal levels, and reforming the financial system to avoid a repeat of the depression. [1] The New Deal led to a political realignment that made the Democratic Party the majority (as well as the party that served seven of the president`s nine terms from 1933 to 1969), with its base in liberal ideas, the South, big-city machines, newly empowered unions, and various ethnic groups. Republicans were divided, with conservatives opposing the entire New Deal as hostile to business and economic growth, and liberals hostile. The realignment crystallized in the New Deal coalition, which dominated the presidential election until the 1960s, while the opposing conservative coalition largely controlled the National Congress from 1937 to 1964.
[2] The New Deal reached every state, city and town, improving the lives of ordinary people and redesigning public space. New Dealers and the men and women who worked on New Deal programs believed that they not only served their families and communities, but also formed the foundation of a great and caring society. In less than a decade, the New Deal changed the face of America, laying the foundation for the success of World War II and the prosperity of the postwar period — the greatest and fairest period in American history.