CandleFocus Glossary Editor
The New Deal was a behemoth undertaking created by President Franklin D. Roosevelt to help the United States escape the economic turmoil of the Great Depression. Prior to this, the economic policies of President Roosevelt’s predecessor Calvin Coolidge (known as the “Coolidge Depression”) had focused solely on tax cuts and spending cuts, which in practice exacerbated the country’s economic woes. In response, Roosevelt made it his priority to get the American citizenry back to work, and the New Deal was his answer.
At the heart of the New Deal was the idea of a regulated capitalism with a well-balanced mix of private and public involvement in the economy. The most important legislations of the New Deal included the Social Security Act (1935), the Wagner Act (1935), and the Bank Reconstruction Act (1933).
The Social Security Act of 1935 provided a federal old-age pension program and the concept of government-funded unemployment insurance for American workers. The Wagner Act (or the National Industrial Recovery Act) of 1935 protected the right of workers to unionize in the private sector, which helped bring wages in line with inflation and gave companies incentives to provide better working conditions.
The Banking Act of 1933 was a three-pronged effort to stabilize the banking system, inject liquidity into the economy, and restructure how banks were operated. In addition to this, the New Deal sought to push the federal government into a more prominent role, such as launching a number of public works programs to employ millions of unemployed. These efforts included the Tennessee Valley Authority (TVA), the Works Progress Administration (WPA), the Rural Electrification Administration (REA), and the Civilian Conservation Corps (CCC). The New Deal also saw the creation of the Securities and Exchange Commission (SEC) in order to protect investors from fraudulent securities practices.
The New Deal undoubtedly helped usher in a more active government presence in the economy, but it also had its critics. During the 1930s, a number of conservative forces attempted to undermine the New Deal, claiming that it was a form of “creeping socialism”. These criticisms became even more intense after the end of World War II, when the controversial Taft-Hartley Act (1947) and other labor deregulations sought to rein in the New Deal’s economic impact. Despite these challenges, the New Deal remains one of the most significant public policy initiatives in U.S. history, and its impacts still shape the American economy today.
At the heart of the New Deal was the idea of a regulated capitalism with a well-balanced mix of private and public involvement in the economy. The most important legislations of the New Deal included the Social Security Act (1935), the Wagner Act (1935), and the Bank Reconstruction Act (1933).
The Social Security Act of 1935 provided a federal old-age pension program and the concept of government-funded unemployment insurance for American workers. The Wagner Act (or the National Industrial Recovery Act) of 1935 protected the right of workers to unionize in the private sector, which helped bring wages in line with inflation and gave companies incentives to provide better working conditions.
The Banking Act of 1933 was a three-pronged effort to stabilize the banking system, inject liquidity into the economy, and restructure how banks were operated. In addition to this, the New Deal sought to push the federal government into a more prominent role, such as launching a number of public works programs to employ millions of unemployed. These efforts included the Tennessee Valley Authority (TVA), the Works Progress Administration (WPA), the Rural Electrification Administration (REA), and the Civilian Conservation Corps (CCC). The New Deal also saw the creation of the Securities and Exchange Commission (SEC) in order to protect investors from fraudulent securities practices.
The New Deal undoubtedly helped usher in a more active government presence in the economy, but it also had its critics. During the 1930s, a number of conservative forces attempted to undermine the New Deal, claiming that it was a form of “creeping socialism”. These criticisms became even more intense after the end of World War II, when the controversial Taft-Hartley Act (1947) and other labor deregulations sought to rein in the New Deal’s economic impact. Despite these challenges, the New Deal remains one of the most significant public policy initiatives in U.S. history, and its impacts still shape the American economy today.