New Deal Term Paper

New Deal

Philosophy and economy of new Deal

The government of the United States became greatly involved in economic issues after the stock market had crashed in 1929. This crash visited most serious economic dislocation on America's economy. It lasted 1929-1940. This prompted President Franklin D. Roosevelt to launch the New Deal to alleviate the emergency. Very important legislations were and institutions were set up during the New Deal Era. These legislations extended federal authority in banking, agriculture, and public welfare (U.S. Dept. Of State, 2013). Minimum standards for wages and hours on the job were prescribed during this period. The legislations also served as a catalyst for expansion of labor unions in steel, automobiles, and rubber industries. Some of the very important agencies like the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, and the Social Security System. The Securities and Exchange Commission regulates the stock market (U.S. Dept. Of State, 2013). The FDI guarantees bank deposits while the Social Security System provides pensions to the elderly based on contributions made while they were still working. The National Recovery Act encouraged business leaders and workers with government supervision to resolve conflicts and in the process increase productivity and efficiency. Under New Deal the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, and the Social Security system shared power. These institutions intervened extensively in economic matters. The War Production Board was charged with the responsibility of coordinating the nation's production capabilities so that the military priorities would be met (U.S. Dept. Of State, 2013). To prevent rising national income and scarce consumer products from causing inflation the Office of the Price Administration was set up. This body controlled rent on some dwellings, rationed consumer items ranging from gasoline, and tried to control spiraling prices. Other legislations that were passed to revitalize the economy were among others the Works Progress Act that involved the government into virtually every sector of economy. Jobs were found for virtually every area of employment. The Agricultural Adjustment Act (AAA) controlled the supply of cotton, wheat, milk, peanuts, corn, and milk. It offered payment to farmers especially if they took some of their land out of production. The AAA enabled the farmers to modernize their operations (U.S. Dept. Of State, 2013). They mechanized their production. They also used insecticides, herbicides, and fertilizers. Farmers were also assisted by the Rural Electrification Program which brought electricity from the cities to rural areas. President Roosevelt Administration also helped establish the Civilian Conservation Corps (CCC) that the youth massively benefited from. It was created for the youth who had finished school and had no jobs (U.S. Dept. Of State, 2013). They worked in national parks and forests within the United States. The CCC helped in reforestation and environmental conservation. It employed over 2.5 million youths and young unmarried youths. The money they were paid not only fed their families but also rejuvenated local economies. The CCC was christened pump-pricing. The Farm Security Administration (FSA) was tailored for rural Americans. The FSA documented Americans who were living in poverty in rural areas. The Rural Electrification Administration (REA) improved farm life and productivity (U.S. Dept. Of State, 2013). The REA financed cooperatives that were organized by farmers. Electrification of rural areas revolutionized rural life. The suburbs began expanding to the rural areas as a result of the rural electrification program. The Works Progress Administration involved the government into every area of the economy. It helped enhance government social programs. The First one Hundred Days was initiated to expand relief programs to the unemployed (U.S. Dept. Of State, 2013).

FDR's Philosophy

The F.D.R. administration instituted myriad social security programs that were meant to cushion American citizens against the aftermath of the Great Depression. One such program that stood out in the first 100 days were the N.R.A., T.V.A., A.A.A., and C.C.C. programs were also initiated that got rid of prohibition (Bortz, 2012). Some programs that I had earlier on talked about were the SEC, relief, and public works programs. Roosevelt philosophy was that the government had a positive responsibility for the general welfare of its citizens. The government must not do everything but everything practicable must be done. President Roosevelt explored the possibility of a mixed system which gives the state more power than the conservative would like (Bortz, 2012). The power had to be sufficient enough to assure economic and social security but not too much to create dictatorship. Roosevelt believed that the U.S. needed and demanded persistent experimentation. His famous quote "The millions who are in want will not stand by silently forever while the things to satisfy their needs are within reach" resonates well with that. He was strongly convinced that older Americans do not need charity but old age comforts but age old comforts which they are rightfully entitled to in the form of insurance. According to him the Federal government system encouraged experimentation as it enabled states to function as laboratories in social legislation (Bortz, 2012). The federal system also ensured that legislations were tailored to the local needs and circumstances. The experience of social insurance and pension progress instead demonstrated otherwise. Individual states were overcome by the fear that such legislations would depart from established standards. Frances Perkins who was a social worker and an industrialist seemed to have inspired F.D.R.'s thinking on social welfare (Bortz, 2012). When Roosevelt took office in 1933, the Federal Emergency Relief Administration (FERA) was established to make grants to states for work relief and direct relief. The FERA made a requisite that Federal funds be publicly administered and relief payments made in cash than in kind. It provided temporary aid to nearly ae of a million persons over sixty five years of age. Roosevelt placed the security of the men, women, and children of the nation first. People had to live in decent homes, be involved in productive work, and be safeguarded against misfortunes which cannot be wholly eliminated. He believed in making better living out of the lands Americans owned. Because the Federal Government was established to promote the citizens' general welfare, he believed that it was the plain duty of the government to provide security which welfare depends (Bortz, 2012). The security of the citizens and the family is guaranteed through social insurance. Various types of social insurance are interrelated and cannot be solved in piecemeal.

Short and long-term programs

While short-term programs were intended to alleviate immediate suffering that was meted out on American citizens by the Great Depression, the long-term programs were initiated to strengthen the economy back to its pre-cash level. The former was called "relief" while the latter was called "recovery." The Agricultural Adjustment Act (AAA) was one of the short-term programs that were adopted after the acceptance of the fact that low farm prices resulted from overproduction (SparkNotes, 2013). Through this program the government stimulated increased farm prices by paying farmers to produce less. The NIRA's fundamental strategy was to centralize planning to combat depression. The Tennessee Valley Authority (TVA) provided money that was used to transform the economies of seven rural southern states along the Tennessee River. The long-term programs were initiated after Roosevelt's re-election. Some of these programs include Indian Reorganization Act (IRA), Works Progress Administration (WPA), National Labor Relations Act, and Social Security Act (SparkNotes, 2013). Some other programs include Soil Conservation and Domestic Allotment Act, United States Housing Authority, and Fair Labor Standards Act. The Second Agricultural Adjustment Act was also enacted during President Roosevelt second term in office. While the Second New Deal legislation relied heavily on Keynesian style of deficit spending, the first new deal did not. The long-term programs were put in place because of the criticisms that were leveled against his short-term programs (SparkNotes, 2013). The criticism was also partly due to the fact that most Americans still needed federal relief assistance. The second New Deal programs and policies were long-term reforms.

How FDR psyched American

When FDR took oath of office he realized that the three years of economic depression had dampened the spirit of Americans. More than 11, 000 banks had failed and destroyed the savings of the visitors. People were out of work and many others were doing jobs that could not sustain their livelihoods (Otis, 1967). The dollar was weaker against major world currencies. To remedy this economic disaster, Roosevelt made an undertaking to address pertaining to agricultural relief, prohibition, unemployment, and old age insurance. He indicated that election of a Democratic candidate would lead to unprecedented growth of the existing government to deal with problems the nation was currently facing. He purposed to get the nation ready for the acceptance of the expansion of federal power (Leuchtenburg, 1963). He averred that the United States constitution was simple and practical and in that way made it possible to meet extraordinary needs without loss of essential form. He declared total combat against the Great Depression and required massive executive support and weight to bring this dream to reality. His famous statement…