The Great Depression was a worldwide economic downturn that began in 1929 and lasted until 1939. It was one of the most severe and longest lasting depressions ever and significantly impacted the lives of millions of Americans. It was an extremely hard time for many, as factories were shut down, farms and homes were lost to foreclosure, mills and mines were abandoned, and people went hungry. The resulting lower incomes meant the further inability of the people to spend or to save their way out of the crisis. The New Deal, with multiple programs assembled by President Franklin D. Roosevelt, included new constraints and safeguards on the banking industry and efforts to re-inflate the economy after prices had fallen sharply. This new role of the …show more content…
It protected bank deposits and helped to reform the banking and economic system. During Franklin D. Roosevelt's First Inaugural Address on March 4, 1933, he states, “It can be helped by realistically preventing the tragedy of the growing loss through foreclosure of our small homes and our farms.” As well as, “We must act and act quickly.'' Franklin Roosevelt is saying that the role of the government needs to be changed in order to prevent future tragedies. If the people didn't change the role of the government everything would have gone even more downhill then it already was very fast. According to the graphs from US economic figures published by Murray Rothbard, there were just about 4000 bank failures in 1933, which was before the FDIC was developed. Just after it was developed, there were barely any bank failures at all. This is another reason why it was necessary to change the role of the government, because banks likely would have kept failing if the FDIC was not established. Other government programs created by the New Deal focused on re-inflating the