The New Deal Prolonged the Great Depression

HIS CASE: It seems to me that what my opponent has done is list several New Deal policies and their effects without actually explaining how these policies managed to prolong the depression. Let's start with the National Industrial Recovery Act and the Agricultural Adjustment Act in 1933. True these acts limited the amount of agriculture that could be produced by farmers; it did not in any way prolong the depression. In fact these policies increased the recovery. Why? By reducing the amount of agriculture that is put into circulation, the government was able to create inflation. "Fewer crops would help raise prices. Then, the income of the farmer would rise. The government therefore paid the farmer not to plant crops" [1]. The government upon forcing the reduction of agriculture subsidized the farmers for their loss. By doing this, the government was able to help farmers increase their profits, which in the long run increased consumer spending. Researchers concluded, "To the extent that the AAA control-program has been responsible for the increased price [as well as], increased the amount of goods and services consumed by the cotton tenants and croppers area. " [2] With new spending injected into the economy by these farmers, this New Deal policy kept the United States economy from complete collapse. "Mr. Higgs argues: "The objective was to raise farm commodity prices until they reached a much higher "parity" level. The millions who could hardly feed and clothe their families can be forgiven for questioning the nobility of a program designed to make food and fiber more expensive. Though this was called an "emergency" measure, no President since has seen fit to declare the emergency over. " [2]" This evidence brought up by my opponent ones again fails to show us that the new deal policy slowed down America"s recovery from the depression. It simply questions "nobility" of the policy. True the nobility of the policy is questionable, the fact still remains that the effects that the policy had on the economy was beyond helpful. If these polices were never put into effect, the American farmer would continue to produce excessively thus pushing the economy further into depression. High Wages: FDR raised minimum wage knowing fully well that it would increase the unemployment rate. His goal however; was not to decrease unemployment, but to stabilize the economy. By increasing the wages, FDR was able to ensure that those employed had enough revenue to buy the goods made by industries. "In the US, under the New Deal, dealing with deflation was deemed to be important, and keeping wages high enough so that people could buy the products of industry was part of FDR"s policy. It meant higher unemployment, but a growing sphere of a new economy. " [3] In contrast, if FDR had left the industries to continue to pay workers lower wages, these individuals would not have enough income and confidence to spend. Without spending industries would start to fail which meant higher unemployment and a faster rate of collapse for the economy. We have calculated that manufacturing wages were as much as 25% above the level that would have prevailed without the New Deal. And while the artificially high wages created by the NIRA benefited the few that were fortunate to have a job in those industries, they significantly depressed production and employment, as the growth in wage costs far exceeded productivity growth The main problem with this evidence is that it focuses on productivity and output as opposed to demand. The only way for the economy to prosper at the time was if and only if there was an increase in demand. This is because an increase in demand leads to an increase in money circulation. To create this increase in demand, the government needed to give people more income to spend. This eventually led to an increase in employment because the increase in demand pushed for an increase in supply. Unemployment Look to previous paragraph for explanation on unemployment. Congress created the Civilian Conservation Corps (CCC), perhaps the most popular of all the New Deal Programs. The CCC provided unskilled manual labor jobs for about 3 million unmarried young men, many of whom might otherwise have drifted into criminal activity. Organized into outdoor government camps, the CCC worked in conservation and development of land resources owned by federal, state, and local governments. They planted 3 billion trees to replace the forests that had been devastated by unregulated industrialization. They fought fires, worked in flood control, drained swamplands, and built public access and service roads in rural areas. Some 800 parks were created, and most state parks were updated. CCC workers wore uniforms, lived in tents, and received $30 per month in wages--$25 of which was sent home to their parents. The pay wasn't much, but the money and the work had a notable effect on morale. [4] Devaluation of the Dollar The devaluation of the dollar helped the U. S economy because it increased foreign demand for U. S goods. It led o an increase in export and an increase in GDP. " Keynes said FDR was "magnificently right" when he sharply devalued the dollar in 1933, even though we had a trade surplus and even though Keynes was British. The devaluation was seen (correctly) as a way of reversing the deflation. And it worked. " [5] So overall, my opponent has failed to prove that the new deal did not increase recovery during the great depression. In fact he only mentions two new deal programs in his entire case and even then failed to provide us with enough reason to propose that these policies prolonged the depression. He then goes on to mention all kinds of policies supported by FDR, but never really relates these policies back to any New Deal program and does not even attempt to give any arguments to show that the policies proposed were detrimental to the economy as a whole. He does not make any statement giving us an idea of how much faster the economic recovery would have been without these new deal programs. High Taxes FDR only raised taxes to finance the war which served as a final thrust out of the depression. Sources: [1] . http://www.yale.edu... [2] . http://www.pccua.edu... [3] . http://firedoglake.com... [4] . http://www.authentichistory.com... [5] . http://www.economist.com...