The New Deal: The Roosevelt Administration During The Great Depression

Great Depression. Businesses of the 1930s, often times did not feel like they understood the future rules that they were going to have to work under. With so many changes being implemented so quickly, many businesses were afraid to take on expansion during a period when the US economy could have used it the most. Many of the actions by the Federal Reserve created an imbalance between production levels, wages, and prices charged. This produced both positive and negative shocks to markets during the Roosevelt administration.

Another key aspect of the New Deal was the emphasis on government spending. From 1934 to 1940, government expenditures for the New Deal increased by $21 billion versus those of the Hoover administration. Cooperative programs,

It is easy to find examples of direct relief in the form of billions of dollars spent on programs for the needy, but was it necessary? It is believed that there is a social benefit to a free market. An underlying principle in economics is that by individually maximizing our own utility, we will also collectively do what is best for society. Resources are scarce, but our wants are unlimited. The combined actions of the individuals drive the actions of the markets. Unfortunately, the New Deal and the Roosevelt administration decided what was best for the market in the 1930s, and they could not have been more wrong. When we look past the lauded efforts of direct relief provided by the New Deal, it becomes hard to identify any actions, singularly or collectively, that helped bring an end to the Great

His “ill-conceived, politically shaped experiments so disrupted the operation of the market economy” and “impeded the full recovery that otherwise would have occurred “(Higgs). One of the basic concepts of economy is that in order to promote economic growth, we must invest in capital goods or future goods. If we commit too many of our resources to consumer goods, we will only be meeting the most basic objective of an economy. By over allocating resources to direct relief and temporary assistance, the Roosevelt administration failed to invest in the future of the United States. Most alarming is the fact that despite the over allocation of resources to capital goods during the early stages of the Great Depression, the United States still witnessed a significant decline in real output. Many historians mistakenly credit the war time spending during WWII with bringing an end to the Great Depression. While it is true that the unemployment rate did decline during WWII, most will acknowledge that we were simply trading labor for debt. It was not until the mid-1940s that the Great Depression would finally end. Ironically, it was through decreased spending that the United States was finally able to get back on the road to