Did you know that the Great Depression was the major turning point in the way the U.S. government conducts itself in the U.S. economy? The Great Depression marks the first time that the Government took an active role in the day-to-day dealings workings of the economy. The change began in 1933 when Franklin D. Roosevelt took the office of President of the United States, with economic reform in mind. Programs and agencies such as Social Security, FDIC (Federal Deposit Insurance Corp.), and the SEC (Securities and Exchange Commission) were created under Roosevelt's “New Deal” with the American people.
In this lesson you will learn about the importance of President Roosevelt's New Deal, during the Great Depression and up to the present. You will gain a better understanding of these programs by learning about fiscal policy, monetary policy, and the role of government. Finally, you will be able to see how the programs created during this time period affect us even today.
Do you have a checking account? Perhaps a savings account? If you do, have you noticed that your accounts are insured?. That's right: Most banks use the Federal Deposit and Insurance Corporation (FDIC) to insure your deposits up to $100,000. This was not always the case. During the Great Depression, many banks failed and people lost all the money they had invested. To combat this major problem the Roosevelt Administration created the FDIC to protect individual investments. Read Who is the FDIC? for a brief history of this agency.
The FDIC is just one example of programs created to foster economic recovery and stabilization under President Roosevelt's New Deal during the Great Depression. With the economy in shambles, change was needed fast to help alleviate serious problems and insure that economic downturns of this proportion would never happen again. Read The Great Depression and The New Deal for a general overview. Continue your research by reading New Deal Agencies for a detailed description of what these agencies did and how they affected the economy.
Now that you have a grasp on the history of the time period and New Deal programs, it is time to inject a little bit of economics. First, read about the Role of Government and think about how government is part of many of the New Deal programs. Next, read about Monetary Policy and Fiscal Policy and think about how the the New Deal programs illustrate these economic practices.
Now put your readings into practice. Click on this New Deal Venn diagram to see how certain New Deal programs match up with the three economic concepts you have learned about.
The Great Depression is one of most important time periods in American History. It was a very trying time for the American people, but these hardships caused by the Great Depression led to vast economic changes. These changes continue to influence the United States today. How would we view the nation's economy without Social Security, the SEC, or FDIC? How many jobs and services are provided by the government? The next time you are walking through a park, crossing a bridge or sitting in a school building, think about the possibility that these places and structures might have been a product of the New Deal.
With the start of World War II many New Deal programs were eliminated but some New Deal programs were so effective that they are still around today, and in some cases they are central to our lives (for example Social Security). Write a short research paper on one New Deal program. Below is a list of web sites for some of the more influential programs. You may choose one of the programs that we still have today or one that was eliminated at the outset of World War II. Some of the programs that were eliminated are interesting today for the light they shed on episodes in our economic history--definitely worth taking a look at.