The Great Depression

FDR"s dramatic New Deal legislation provided radical reforms, relief, and recovery efforts during the Great Depression. One of the most controversial actions in US History, the New Deal still remains highly contested. Proponents will attempt to defend it on the basis of the "relief" that it spurred, but many fail to consider the wild amounts of resources that had to be allocated for this legislation. FDR enacted poor legislation to adequately deal with the crisis, clearly evident during analyzation of the actual effects of the New Deal not clouded by the gilded depiction of the period. The New Deal was a haste decision that provided "feel good" regulations, administrations, and government interference in the US economy, all approved under a government controlled by one political faction. FDR would do anything to ensure that his New Deal was passed, including altering the very structure of our sacred Supreme Court to bend to his will. The United States was lucky for the economic stimulation that the second world war caused, as it was the true savior from the wretchedness that chased the country"s citizens through the 1930"s. FDR"s Relief: The AAA was basically loaning money to farmers not to farm, in fact perfectly good fields of cotton, tobacco and corn were plowed under and hundreds were slaughtered and put into mass graves. The AAA curtailed supplies and rose prices leading to lower consumption rates and starvations.On April 8th, 1935, FDR signs the Emergency Relief Appropriation Act. This was a $5 million act, but the government still has not seen this money again."High wages and high prices in an economic slump run contrary to everything we know about market forces in economic downturns," Ohanian said. "As we've seen in the past several years, salaries and prices fall when unemployment is high. By artificially inflating both, the New Deal policies short-circuited the market's self-correcting forces."-OhanianUseless jobs were created by the WPA like painting murals and chasing tumbleweedsUnemployed did not get any job relief until World War II helped make the economy betterFDR"s Recovery:The NRA (National Recovery Administration) and NIRA (National Industrial Recovery Act) increased the cost of doing business, by an average of 40 percentNew Deal pledged spending 10 billion dollars, while revenue was only 3 million, government spending rose by 83 percent and Federal Debt increased by 73 percent FDR attempted to add liberal justices to the SCOTUS to support his policies which were heavily opposed by the SCOTUS at the time. Roosevelt tried to manipulate the government in his favor and turn himself into a de facto dictator with no political opposition.FDR prolonged Great Depression by 7 yearsGreat Depression was created by government involvement, and prolonged by government involvement such as the New Deal, Fed policies, Smoot Hawley Tariff New Deal programs were financed by tripling federal taxes from $1.6 billion in 1933 to $5.3 billion, The US debt doubled from 19 to 40 billion. National Industrial Recovery Act (NIRA) of June 1933 [Declared unconstitutional, prices stabilized at first but then rose drastically ]Federal Securities Act of May 1993/ Securities and Exchange Commission (SEC) [not pleasing for business]Home Owners Loan Corporation (HOLC) / Agriculture Adjustment Administration (AAA) [declared unconstitutional]The Tennessee Valley Authority dammed up rivers in Tennessee and flooded rural farmland the size of Rhode Island. TVA agents dispossessed thousands of people. Poor black farmers received no compensation for their lost property.FDR raised top income rate tax to 96 percent, stagnating growth and developmentTaxes on corporate earnings, also known as "undistributed profits tax", plunging stock markets farther and farther down and stagnating wealthFDR"s useless job creation was one of the pinnacle of his New Deal failures; "Roosevelt"s public relief programs hired actors to give free shows and librarians to catalogue archives. The New Deal even paid researchers to study the history of the safety pin, hired 100 Washington workers to patrol the streets with balloons to frighten starlings away from public buildings, and put men on the public payroll to chase tumbleweeds on windy days." These useless jobs came at the expense of tax dollars which could have been circulated in the economy and created useful jobsFDR"s Reform- The resulting success in the 1940s weren't because of FDR"s policies, but rather because of increase of trade due to WW2"s destructive effects and Truman"s relaxing of FDR"s strangling protectionist policiesLabor Unions increased massively under FDR"s rule, labor union participation increased 2.5 percent from 1935 to 1941; this increase in labor unions also resulted in terribly inefficient policies such as lobbying of minimum wage increases, pension demands that later manifested into the Social Security ACT, and other anti productivity laws.After part 2 of the New Deal was launched, the percentage of unemployed workers jumped back up from the low 20s to almost 30%. Even with the FERA, Unemployment remained in double digits FDR"s New Deal programs were financed by tripling federal taxes. Items purchased by middle class individuals were subject to the major taxation, such as cigarettes, candy, electricity, etc. In order to pay for the New Deal, the American middle class was heavily taxed which strained their ability to put money into the economy, and contributed to a wider gap between the middle class and the rich.13 recessions in U.S. since New Deal-"Reforms were hastily drawn and weakly enforced, often contradicting each other" -Roosevelt"s reforms were highly contested, he almost abused the Democratic control of government. -Reforms directed towards blacks were unsuccessful in that they did little to assist with the segregation that hindered prosperity among blacks, so he could keep Southern votes. - Currency reforms would cause prices to rise, massive inflation following the removal of the US Gold Standard and falling confidence in the US Dollar. - Most government spending did not actually go to the poorest areas, it went out west. - The cost of employing people rose 25% since FDR laws enforced Union principles.- 14.5% vs 9.5% unemployment, difference is due to work relief jobs. Unemployment rate without temporary work relief jobs were closer to actual rates of unemployment before relief projects were added.- Roosevelt"s SC expansion in 1937 immediately neutralized the court which was hostile to his New Deal, and unemployment saw a spike upwards immediately afterwards that his legislation was being passed. - A second recession was actually experienced 1937-1938, 1929 levels of production and unemployment were the same (aka bad)- Stock prices were continually falling around 40% despite SEC - 2008 recession and SEC - Bank runs were still a problem despite the efforts of the FDIC to protect banks Conclusion: While the New Deal legislation may have been in good faith, the poor institution of it led to the unstable and overinflated 1930s. The second recession that occurred despite the New Deal, Continual falling prices and rising unemployment, and prolongment of the Great Depression all point to the conclusion that the New Deal failed in its goal of resolving the economic turmoil and only aided citizens in their hope for better times. Citations: https://web.stanford.edu...https://chnm.gmu.edu...http://www.johndclare.net...Powell, Jim. "How FDR's New Deal Harmed Millions of Poor People." CATO Institute. N.p., 29 Dec. 2003. Web. 9 Mar. 2017."New Deal - Facts & Summary." History. N.p., n.d. Web. 9 Mar. 2017.https://www.cato.org...Jim Powell December 29, 2003. "How FDR's New Deal Harmed Millions of Poor People." Cato Institute. N.p., 29 Dec. 2003. Web. 09 Mar. 2017.http://www.wikiwand.com...http://newsroom.ucla.edu...https://www.fdic.gov...https://fee.org...