Question

. In your opinion, what are the two most lasting (meaning they still exist today) aspects of the New Deal? Explain your answer.

own word pls

Answer 1

New Deal included certain public work projects, programs, regulations, and financial reforms that were enacted between the years 1933 and 1939 by the then President of USA Franklin D. Roosevelt. The New Deal programs and regulations were critical towards the recovery of the economy of the USA from the Great Depression that began with the crash of the stock market Wall Street in the year 1929. Some of the noteworthy agencies, laws, and Federal programs that were included in the New Deal era reforms and regulations included the Civil Works Administration, Civil Conservation Corps, the National Industrial Recovery Act of 1933, the Farm Security Administration, and the Social Security Administration. New Deal had certain safeguards and constraints for the banking industry so that any future depression could be avoided, while it also had programs for the unemployed farmers, elderly, and the youth of the country (including relief in the form of monetary aid). Some of the legacies or lasting aspects of the New Deal are given below.

Social Assistance

The Social Security Act of the year 1935 established a better bond between the common people and the State and Federal governments. Social security was a permanent system for retirement pension for all US citizens, which was established under the Act. Further, welfare benefits, as well as unemployment insurance, were also introduced for needy and handicapped children of families that did not have a father.

Many of the social assistance programs existing in the present-day United States may be traced back to the New Deal ideals. These may include acts and regulations supporting the disabled, subsidized housing for common people, farm subsidies, insurance for the unemployed, and child support programs for children of poor families. The state and the federal government started to practice a more proactive role in regulating the economy and supporting the needs of the deprived directly during the New Deal era and its aftermath only.

Political Legacies

The view that the New Deal era happenings brought some critical changes to the practice of politics in the United States of America is held by many historians. The Roosevelt Presidency broke many traditional bonds for helping common people and the power of the Federal government, as well as the President, also increased during the era. The next generations of reformers in the country were also inspired by the New Deal ideas. The New Deal era was also the time during which the two main and leading political parties of the USA underwent a substantial change. The black Americans, labor unions, as well as the working class, became the most loyal supporters of the USA’s Democratic Party. The coalition formed during the New Deal era was critical towards making the Democratic Party of USA the majority party. These developments influenced the politics of America until the 1980s.

Banking Reforms

Bank failures increased during the times of the Great Depression and were also followed by the credit crunches. Important causes for bank failures at that time included bank runs (symbolized by the majority of clients withdrawing that their money from banks) as well as the losses incurred by the investment banking sector. Investors were fearing that their deposits would not return to them and the banks may go insolvent. They hence withdrew all their savings, thereby causing bank runs. When money was drained out of the banks, the supply of it shrank. Economic activities diminished and deflation occurred as consequences. The Emergency Banking Act of the year 1933 attempted to stabilize this worsening banking system. The Glass-Stegall legislation was also crucial in separating investment banking and commercial activities. An attempt was made to regulate the speculations and to make the system more transparent and accountable, something that can also be seen in the later Acts including the Sarbanes-Oxley Act. The Federal Deposit Insurance Corporation was established, which ended the bank runs by ensuring a deposit of $ 2500. Because of these new regulations and programs, the failure rate of banks reduced to a great extent and the trend is being followed till now as well.

It was only during the New Deal era that banks were prevented from practicing and engaging in insurance and securities businesses. Many of the banks in the USA took dangerous stock market risks and ran into trouble later. Other banks were providing monetary loans to companies where their own officers or directors had made personal investments, which was an unethical practice. The Emergency Banking Act was crucial towards the opening of credible banking institutions that were monitored by the US Treasury directly and were also backed by monies coming from the Federal Government. The Glass-Steagall Act ensured that securities, banking, and insurance businesses did not mix. The two laws were crucial towards providing more stability to the banking sector and industry of the USA, which is relevant and prospering till now as well due to the thoughts and visions promoted during the New Deal era. While the Glass-Steagall Act was repealed later, the New Deal programs nonetheless brought a more structured and controlled approach and practical safeguards for the banking industry.