The New Deal

The New Deal was a set of domestic policies enacted under President Franklin D. Roosevelt that dramatically expanded the federal government’s role in the economy in response to the Great Depression.

Origins of the New Deal

The phrase "New Deal" encompassed Franklin Roosevelt’s many programs designed to lift the United States out of the Great Depression.

The New Deal created a broad range of federal government programs that sought to offer economic relief to the suffering, regulate private industry, and build the economy. The New Deal is often summed up by the “Three Rs”:

  • Relief (for the unemployed)
  • Recovery (of the economy through federal spending and job creation)
  • Reform (of capitalism, by means of regulatory legislation and the creation of new social welfare programs)

Roosevelt’s New Deal expanded the size and scope of the federal government. This fundamentally reshaped American political culture around the principle that the government is responsible for the welfare of its citizens.

The First New Deal (1933-1934)

Some of the ideas behind the new laws and agencies:

  • Boosting agricultural prices by offering government subsidies to farmers to reduce output.
  • Employing young, single men at federally funded jobs on government lands.
  • Giving federal grants to states that paid government workers.
  • Guaranteeing industry-specific prices and wages, and the workers’ right to unionize.
  • Guaranteeing that money in a bank would be repaid if the bank went out of business.
  • Regulating the stock market.

The Second New Deal (1935-1938)

The second phase of the New Deal focused on increasing worker protections and building long-lasting financial security for Americans. The most important pieces of legislation:

  • Employing millions of Americans in public works projects.
  • Guaranteeing workers’ rights to form unions and bargain collectively.
  • Establishing the Social Security fund that makes monthly payments to retirees and the disabled.
  • Setting a 40-hour work week with overtime, an hourly minimum wage, and restricted child labor.

Source: The New Deal
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