GREAT DEPRESSION AND NEW DEAL This research pap

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 De

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high tariffs and excessive stock market speculation were fundamental causes of the Great Depression. Insufficiency of demand and a corresponding decline in private investment were the products in part of a gap between rising productivity in the 1920s and lagging wages and farm prices. However, Schumpeter and Keynes disagreed on the remedy. Schumpeter said "recovery is sound only if it does come by itself" (Galbraith 38). Keynes "led the attack on the conviction that depressions were self-correcting" (Galbraith 157). He believed that "government . . . had within its power the means to offset decline in private aggregate demand" by "subsidizing capital formation and . . . purchasing power" through counter-cyclical fiscal policies (Atack & Passell 636; & Schlesinger 76). Actually, FDR's imposition in 1938 of a tax on undistributed corporate profits ran counter to Keynes' advice and may have helped retard the recovery. Reform The widespread suffering and misery which accompanied the Great Depression as well as its seeming intractibility caused many Americans to question the efficacy and fairness of the capitalist system. Some New Deal reforms, therefore, such as the Securities Act of 1933 and the Public Utility Holding Company Ac
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Approximate Pages = 12 (250 words per page)

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