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How the Unites States overcame the Great Depression

Published onDec 06, 2022
How the Unites States overcame the Great Depression

On October 24, 1929, the stock market crashed, launching the United States into a depression that would last over a decade, often considered the worst economic depression in United States history. Facing the impending depression, Presidents Hoover and Roosevelt scrambled to find a solution. With the election of Franklin Roosevelt in 1932, Roosevelt campaigned for a “New Deal,” a series of policies that would allow the government to pay large sums of money to unemployed citizens in exchange for public works. After the first New Deal in 1933, the Gross Domestic Product of the United States steadily increased from 62 to 76, and after a slight dip in 1937 infamously named “Roosevelt’s Depression,” the GDP continued to rise for decades.

While most historians agree that following Roosevelt’s election the overall quality of life increased in the United States, the primary question is what caused this increase. Some historians propose that the New Deal had little effect on the recovery of the United States’ economy. These historians criticize the recovery of the New Deal as “weak,” claiming that the economy would have recovered faster had Roosevelt not intervened with his New Deal policies. Contrary to that belief, evidence supports that through the programs of the Civilian Conservation Corps, the Tennessee Valley Authority, the Works Progress Administration, and others, Roosevelt’s first New Deal helped decrease unemployment and was a significant factor in the recovery of the United States following the stock market crash of 1929 and the election of Franklin Roosevelt in 1932.

Considerably the most significant argument proposed by historians suggests that the first New Deal’s programs directly combatted unemployment. Unemployment rose directly following the stock market crash of 1929, and then decreased after the passing of many New Deal programs. In the 1920s, many entrepreneurs purchased large equipment with credit, relying on good economic conditions. When the stock market crashed and the economy collapsed, many banks attempted to collect money from private business owners, forcing them to create new ways to pay back the bank. A popular response was laying off employees in order to conserve money. This caused unemployment to increase dramatically following 1928.

Although World War II did provide factory employment to supply resources for the war, programs such as the CCC and the WPA directly provided employment to millions of citizens specifically in Massachusetts as well as across the country. So, although Roosevelt’s decision to involve the United States in World War II did help jump start the economy, the issue of unemployment had already begun to resolve specifically through the CCC and WPA programs.

Another argument proposing the New Deal significantly helped the United States is from the psychological viewpoint. Psychologist Bremer argues that the opportunity for unemployed persons in the United States to seek employment, although it may not have had the largest economic impact, gave the United States people the proper motivation and mindset to “pick themselves up by their bootstraps.” This psychological viewpoint holds the argument that the New Deal helped economically as truth, and then explains how the feelings associated with the New Deal boosted the overall morale of the country. By giving an unemployed person a job, they are also receiving a feeling of pride that comes with being able to provide for their family.

In conclusion, Franklin Roosevelt’s New Deal is what brought the worst economic and social depression in the United States’ history by directly combating unemployment, providing relief to those who needed it, and by giving the psychological perspective needed to boost overall morale.

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