Franklin D. Roosevelt's Fiscal Policy During The Great Depression

If the US government had a dollar every time someone proclaimed to learn the lessons of the Great Depression, we probably wouldn’t have a budget deficit. Usually, these debates turn on the question of fiscal policy, and whether in fact, FDR’s New Deal had a discernable role in generating a recovery. Fiscal conservatives have done much to dismiss the economic achievements of the New Deal, some even suggesting that FDR’s fiscal policies worsened the crisis. The use of fiscal policy during the Great Depression in Canada and the USA was effective in bringing the economy out of recession, which can be seen through the statistics of the results of Franklin D. Roosevelt’s and Richard B. Bennett’s New Deal.

The first question is: Was the 1937 problem

The key to evaluating Roosevelt’s performance in combating the Depression is the statistical treatment of many millions of unemployed engaged in his massive workfare programs. According to cited statistics, the government hired about 60 per cent of the unemployed in public works and conservation projects that planted a billion trees and more. It also built or renovated 2,500 hospitals, 45,000 schools, 13,000 parks and playgrounds, 7,800 bridges, 700,000 miles of roads, and a thousand airfields. And it employed 50,000 teachers, rebuilt the country’s entire rural school system, and hired 3,000 writers, musicians, sculptors, and

Now they’re stating that “excessive” government spending risks crowding out private spending, making it impossible for the Canadian and American governments to deal with the recession (because they have run out of money because of excessive government expenditure), and hindering the capacity of the private sector to recover because of too much government interference in the “free market”. These complaints are usually accompanied by conservatives condemning the “business un-friendly” policies of the Canadian and American administration, along with dire warnings of a “national solvency” crisis. About the criticism of FDR’s “high wage” policy by Cooley (1933) and Ohanian (1933), it is important to recognize that the wage “inflation” which they say was a product of a deflationary environment in which the general price level fell faster than the money wage level. During the outset of the Great Depression, output collapsed in the face of the US federal government’s fiscal inaction and central bank interest rate hikes. This had the strange result of generating a real wage increase, which in fact was nothing more than a product of depressed nature of the economy, in which overall prices were deflating prices faster than wages. Overlaying the wage data with the true reduction in unemployment between 1933 to the end of 1936 makes it difficult to say that FDR