The New Deal, introduced by President Franklin Delano Roosevelt in the 1930s, was a comprehensive government effort to stimulate the economy and improve the lives of ordinary Americans during the Great Depression. It marked a historic shift in the government's role in the economy and the daily lives of Americans. The New Deal included investments in infrastructure, social programs, and public artwork, and it expanded the government's role, leading to increased interaction between Americans and the federal government through programs like Social Security and federal deposit bank insurance. The New Deal is considered the largest peacetime growth of government in American history.
The impact of the New Deal on the U.S. economy was profound. It not only provided short-term relief but also laid the foundation for long-term economic growth. The New Deal expanded the government's role in regulating the economy and implementing social programs, such as Social Security, which was originally intended to address poverty and insecurity faced by elderly Americans. The debate on the temporality of Social Security continues, with some arguing it was meant to be a temporary solution, while others believe it was intended to be a permanent fixture of the American social safety net.
The Great Depression, which began in 1929 when the US stock market crashed, resulted in skyrocketing rates of unemployment, hunger, and desperation. Over 15 million Americans were left jobless and desperate for an income. By 1932, nearly one in four Americans was out of a job, and by 1933, unemployment levels reached an estimated 25%. Thousands of Americans lost their homes and attempted to travel through the country to find work. Families lived in crowded shacks, caves, or sewer pipes. An estimated 1.2 million Americans were homeless during the winters of 1932 and 1933. Families planted their own gardens, sought out soup kitchens, and stopped buying common items like milk to save money. President Herbert Hoover's lack of federal aid and intervention led to widespread anger and blame. The Depression had a negative impact on family life, with many couples delaying marriage and having children. Black and Mexican communities experienced higher rates of unemployment and discrimination. Suicide rates increased during the Depression.
President Franklin Delano Roosevelt's New Deal helped boost the economy and fundamentally changed the relationship between Americans and their government. The New Deal provided relief, recovery, and reform through various programs and initiatives. It created jobs through public works projects, provided financial assistance to farmers, regulated the stock market, and implemented social welfare programs. The New Deal also had a lasting impact on the arts and culture, with the creation of programs like the Works Progress Administration (WPA) that employed artists, writers, and musicians to create public artwork and document American life during the Great Depression.
The ongoing discussion about President Joe Biden's federal investment plans and the possibility of them having a similar transformative effect on the U.S. economy reflects the historical significance of the New Deal. Congress has already authorized over $1 trillion in spending through the Bipartisan Infrastructure Law and other acts, which could lead to significant changes in the economy. To explore this topic further, Marketplace host Kai Ryssdal has launched a new series called "Breaking Ground," which examines how federal dollars could change the economy.
Jason Scott Smith, professor of History at The University of New Mexico, recently spoke with journalist Kai Ryssdal on the public radio program "Marketplace," as part of their insightful new series "Breaking Ground." In this episode, Ryssdal explores the legacy of the New Deal for the U.S. economy, and Smith provides historical context on the evolving role of the federal government in the American economy. The episode has a special focus on the impact of the New Deal during the Great Depression and oscillates between interviews with Smith, Price Fishback, professor of Economics at the University of Arizona, and Natalie McDonald, graduate student in history at California State University, Northridge. Smith connects local experiences with national-level historical narratives, highlighting the many ways in which the New Deal continues to influence contemporary policy and explains today's debates over the importance of government programs. Jason Scott Smith is a two-time published author through Cambridge University Press and a specialist in the history of capitalism and political economy. He is the author of "Building New Deal Liberalism: The Political Economy of Public Works, 1933-1956" and "A Concise History of the New Deal." Smith's teachings on modern American history, the Great Depression, and the history of capitalism span almost two decades at UNM. He completed his Ph.D. at the University of California, Berkeley.
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