This research paper summarizes and evaluates the impact of the domestic policies employed by the New Deal administration of Franklin Roosevelt (FDR) to cope with the Great Depression.
Under FDR's dynamic and pragmatic leadership, the New Deal wreaked a transformation in American political and economic life.
A new and long-lasting political coalition was created as the New Deal brought into being the foundations of a greatly expanded Welfare State. It empowered groups such as workers, farmers, the elderly and the rural and urban poor; and it guaranteed many of them for the first time at least a subsistence standard of living and greater representation in politics. The aims of New Deal policies were fourfold, the restoration of confidence, relief, recovery and reform. In the first New Deal (1932-1936), the measures taken by FDR and the Congress helped restore confidence, alleviate suffering and began the process of addressing excesses of the capitalist system. Important steps were taken to improve the security of Americans and expand the regulatory powers of the federal government over the economy in 1935 and during the Second New Deal (1937-1940). However, Government tax and spend policies, including Keynesian deficit spending which characterized the Second New Deal, to stimulate the economic recovery only partially succeeded. Nevertheless, some reforms contributed to the long term stability of the economy and to political moderation. The reformist impulses of the New Deal were slowed by the 1938 recession, political mistakes by FDR and the imminent fascist threat from abroad. A new consensus developed in World War II in favor of using government to foster economic growth and against making further radical changes in the nation's capitalist economic system.
When FDR assumed office in January 1933, the American system of democratic capitalism faced a crisis of monumental proportions. Economic distress and social unrest were w...