Saturday, December 6, 2008

How effective was the New Deal legislation in bringing the US out of the Depression?

Most historians would say that the New Deal programs were at least somewhat effective in getting the United States out of the Great Depression.  They would say that the New Deal began to get the country out of the Depression, but they would also say that the programs were not enough to get the country completely back on track.  The United States only really got back to prosperity when it started to prepare for World War II.


Almost all historians (outside of some conservatives) believe that the New Deal really did help the economy.  The numbers suggest that this is true.  As you can see in the link below, the US economy bottomed out in 1932 before President Franklin Roosevelt was elected.  After he was elected and started to implement the New Deal, the economy clearly improved, though it did suffer another downturn in 1937.  This suggests that the New Deal actually caused the economy to improve.  (Conservative economic historians believe that the recovery would have been faster and longer-lasting if the government had not implemented the New Deal.) 


However, it is also clear that the economy remained very weak for years after the New Deal began.  By 1939, the US’s GDP was still no higher than it had been before the Depression began.  This means that, even after the New Deal had six years to work, it had still not really gotten the economy back on track.  Instead, the economy did not manage to take off until 1939, when the US started to manufacture more military materiel as it prepared for World War II.  This is why historians generally say that the New Deal managed to help stop the Depression, but that it did not actually end that economic crisis. 

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