Pros and cons of the new Deal

Pros and cons of the new Deal

In 1933, President Franklin gave his first response to the Great Depression. He introduced something that people refer to as the New Deal. This is simple was a series of programs that addressed recovering the economy after the prices started to inflate. The moves targeted the agriculture, the youths and the elderly. The new deal introduced many constraints and other regulations in the banking sector to recover the prices. Although many people thought that the New Deal is the way to go, others thought it has plenty of cons which would mean danger to the current economic situation.

 

Pros:

1. Confidence in the American economy-With so many things happening all at once in the American economy by this time, many people started to lose confidence with the economy but the New Deal brought measures to restore this confidence.

2. People started to trust the banks with their money-Roosevelt reopened the banks but only those that were well organized. This made people start trusting the banks with loans and savings.

3. Increased employment rate-as I had stated earlier, the New Deal targeted the youths and helped them greatly secure employment. For this reason, it dropped the unemployment rate from 25% to 14% in four years.

4. Visible developments– The president made sure that the economy is stabilizing and so, many schools, hospitals, and roads were constructed. All these efforts benefited the economy and also created more opportunities for farmers to transport their produce.

5. Capitalism was saved-Very few people expected that this can benefit the economy without killing capitalism. Though, with the New Deal, Capitalism was saved.

6. Farmers benefited positively. The New Deal wanted to motivate the farmers to produce more. For this reason, the farmers were given seeds and fertilizers and also roads were constructed to open farms and make it easy for them to transport their produce.

7. Fireside chats-Roosevelt would address the nation via radio about his ideas. This way, he assured the people that his government would help in such situations.

8. Trust between the employees and the employers-The New Deal restored the trust between the employees and the employers. The president was sympathetic towards the workers and hence employers had no option but treat them better.

9. New Deal cleared ways for the following governments-People believed that if it were not for the New Deal, the Federal government that followed wouldn’t make America the greatest nation on earth.

10. Safety net-The New Deal was not socialism at all, but it provided a safety net for the groups that suffered the wrath of capitalism.

 

Cons:

1. Money wasting-although this series of programs helped the nation greatly, republicans accused the New Deal of wasting money. They believed that it encouraged overspending.

2. Didn’t adhere to Laize Fairre-Many people believed that the New Deal went against the American way of life. They also noted that Franklin’s government interfered with the economy.

3. It was unconstitutional-There were some claims from the Supreme Court that the New Deal was not constitutional. Though, we would expect this because the American tradition of Laize Fairre didn’t give the government any mandate to interfere with the economy.

4. Higher taxes-some players in the economy resented paying very high taxes. They explained that the high taxes they paid were to wheel the New Deal.

5. Crush between the unions and the employers-The Roosevelt respected and sympathized with the employees which gave unions more power to demand higher pays. This introduced a crush between the employers and the unions.

6. It took so long to solve unemployment-The New deal took about 5 years to significantly reduce unemployment. This didn’t please some Americans.

7. No significant results-People thought that the only way to deal with the Great Depression was the end of WWII so, thought that this was a wastage of money.

8. Discrimination– many Americans thought that the New Deal discriminated against African Americans, women and immigrants. This was evident because many jobs created were aimed at helping white men and especially Americans.

9. The close relationship between socialism and the New Deal-Some Americans started comparing the New Deal with the works of Hitler. This is actually the reason why they thought its socialism.

10. It lead Americans in the direction of command economy-Americans have never supported the Government’s interference with the economy. What this means is that many people thought that the Government is doing something wrong by interfering with the economy.

This Post Has 2 Comments

  1. Mike M

    I came looking for an objective and balanced summary of the pros and cons of the New Deal. This generally is not. The pros are majority matter of fact and cons have majority qualifiers. Could have been a good straight forward assessment being more valuable to the reader. Other sites proved more helpful

    1. admin

      Mike, you can send me your edited work. I will include it.

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