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What Was the New Deal?

Mary McMahon
Updated May 17, 2024
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The New Deal was a series of social, economic and governmental reforms initiated from 1933 to 1938 by the administration of US president Franklin Delano Roosevelt in response to the Great Depression. At the time, Roosevelt's reforms were met with criticism from some quarters and praise from others; in retrospect, the New Deal was a major event in American history. Legacies of Roosevelt's programs can be seen in every state, and it is clear that the New Deal helped shape American society and American attitudes.

Stock Market Crash

In 1929, the American stock market crashed catastrophically, setting off a domino affect throughout the US economy that led to the Great Depression. In addition to its economic struggles, the US was facing major issues in the farming sector as it became clear that land use policies were not sustainable. Many Americans suddenly found themselves extremely poor, which triggered social unrest in the already troubled nation.

Relief, Recovery and Reform

Roosevelt felt that the country needed three things: relief, recovery and reform. The New Deal focused on providing relief to unemployed Americans and the troubled manufacturing sector while promoting economic recovery and reforming the US finance system to prevent the recurrence of the Depression. Roosevelt pushed many acts of legislation and policy that came to be collectively known as the New Deal, a reference to a statement that he made in his inauguration speech.

Job Creation

Relief was provided through social programs that created employment for many Americans. The Tennessee Valley Authority (TVA) employed thousands of people to build electricity-producing dams. New Deal work crews helped construct state park facilities, build homes, pave roads and build public structures, among many other things. The New Deal also established the Social Security program and pushed membership in labor unions as well as sustainable farming policies.

Financial Reform

American financial systems also were reformed, and the Emergency Banking Bill of 1933 helped stabilize a struggling banking system. Roosevelt pushed for a federal budget that was balanced, except for the emergency spending that was needed to overcome the Depression, as well as more financial responsibility and other policies that promoted economic health and growth. He also encouraged involvement in the Second World War, which helped revitalize the US economy. In addition, the New Deal had an impact on the arts because it established funding for artists under the Works Progress Administration (WPA). Many enduring artistic expressions of the Great Depression were produced by artists with support from the WPA.

Lasting Programs

Many programs created by Roosevelt remained in effect into the 21st century. Some still had the same names, and others had evolved and were operating under new names. Among programs that were still in effect in the early 21st Century were the Social Security program, the Federal Deposit Insurance Corporation (FDIC), the Securities and Exchange Commission (SEC), the Federal Housing Administration (FHA) and the National Labor Relations Act (NLRA).

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Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a America Explained researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments
By anon319975 — On Feb 15, 2013

The new deal did not bring America out of the great depression, rather it was the opposite. It hurt the American people perhaps more than any other piece of legislation in American history, patriot act included. People who say nonsense like the new deal saved capitalism from itself, only listened to FDR's propaganda rather than examining his policies, which included the destruction of millions of pigs, tons of grain and milk at a time when people were starving.

By anon255770 — On Mar 19, 2012

This does show how crazy this time period was and it does show the crisis that President Hoover caused us. I'm not saying the president was bad or anything, just that he needed a little more help justifying our country, that's all.

By anon155844 — On Feb 24, 2011

how many of fdr's new deal policies are there?

By anon147532 — On Jan 29, 2011

I think the New Deal could have brought us out of the Great Depression if it had more time to take effect.

"He also encouraged involvement in the Second World War, since he knew that it would revitalize the American economy"

If FDR's only encouragement to enter World Wa II was to get out of the Great Depression, I would be shocked because I would rather have financial troubles than commit myself to the war.

By anon144475 — On Jan 19, 2011

anon127849 is right. Besides, the mafia was created because of prohibition.

By anon127849 — On Nov 17, 2010

I just want to say that anon116126 is completely wrong. The only reason we got out of the great depression is because of World War II. Without it America would have crashed and burned. I do not think war is a good thing but in some cases it's the best option.

By anon116126 — On Oct 05, 2010

Yes, FDR was a great president in terms of the New Deal reforms to social, economic and governmental progress. But he, like most all American presidents, made the historical mistake of pushing the U.S. into war. More Mafia moves by our nation for "power".

Economic prosperity is not worth anyone's lives, boys any more than girls. If you want to hold onto the false notion that the U.S. has ever really "fought for its freedom, independence and democracy", that's your prerogative, but be sure not to be such a hypocrite as not to encourage your own daughters to to fight for this "freedom".

Ironically, those very ideals we have been conditioned to believe we fought for and impose on all other nations are declining now due to our wars. $1 trillion spent on "defense" since 9/11 while our educational system and health care system crash and burn. I am too patriotic to keep up the pretense.

By anon108885 — On Sep 04, 2010

@Sunny27: Your negativity is utterly disheartening. Even if the New Deal did not promote economic recovery as you said, it at least gave the American public something with which to work. The elements of the New Deal allowed people to focus on improving the future instead of dwelling on their less than satisfactory past and present.


By cafe41 — On Jun 30, 2010

It is interesting how many people now look at the New Deal and question its effectiveness. Many have made ideological parallels between President Obama and FDR. They feel that the stimulus packages and all of the added government spending is the modern day version of Obama’s New Deal. Only time will tell if Obama’s programs develop the longevity that the New Deal programs have.

By Sunny27 — On Jun 30, 2010

@Nasturtium - I respectfully disagree that FDR brought the U.S into recovery. According to the Heritage Foundation, unemployment reached an all time high of 24.9% unemployment and dropped minimally to 19% by 1938. Many believe the advent of World War two lowered unemployment and set the U.S. into economic recovery. FDR created huge government entitlement programs which grew the size of the government. This did not add jobs or stir economic growth. The private sector needed stimulation in the form of tax cuts in order to hire additional staff, but the high taxes that the New Deal programs proposed stifled businesses and made it even harder for Americans to find work. I don’t think the “New Deal” was a good deal at all.

By nasturtium — On Apr 19, 2008

It's interesting that in the age of television and 24-hour news channels, FDR probably would never have been elected. With being in a wheelchair for part of his term especially, he would be portrayed as weak. And instead, he helped bring the United States out of a depression.

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

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