The New Deal - Agencies, Programs, Pros, Cons, Impact

The Great Depression was the worst depression in American history. It began in 1929 and did not end until World War II.  Things were a mess when FDR (Franklin D. Roosevelt) was elected US President in 1932. Over 28% of the population was out of work. Nearly every bank in the United States had failed. People were starving. Things were desperate.

Immediately upon taking office, FDR and Congress introduced 50 new laws, sweeping reforms called the "The New Deal".  New federal agencies were created to provide relief, recovery, and reform (the 3Rs.) FDR used his "Fireside Chats" on the radio to keep people informed and encouraged.

As New Deal programs were implemented, things did improve. But the Great Depression did not end. New Deal programs were expanded. More programs were added. Some programs were a waste of Congressional funding. Others were excellent. Some are still in place today.  

 Over 50 different agencies and programs were created as part of The New Deal. They were nicknamed the "Alphabet Agencies". Some of the agencies created in the 1930s like the SSA (social security) and the FDIC (banking security) are still in place today, still protecting people and helping people to achieve a better life.

Opponents of the New Deal: It was not easy for Roosevelt to implement these programs. The New Deal had many opponents. There were two types of opponents - those who said these programs did not go far enough and those who said these programs went too far. The Liberals (the right) thought these programs did not do enough for the people. The Conservatives (the left, the Conservative Coalition) thought these programs went too far to control business. In total, 11 out of 16 of Roosevelt's New Deal programs in cases heard by the Supreme Court were declared unconstitutional because they were programs that the Supreme Court believed should be run by individual states, and not by the federal government. While opponents raged, some in the media, some in Congress, others in speeches, Roosevelt continued his attempts through his New Deal programs to restore the American economy.

The 2nd New Deal: Franklin Delano Roosevelt (FDR) served 3 terms as president of the United States. He was the only president to serve three terms. (This is no longer possible. The term of office is now limited to 2 terms.) Roosevelt did not accomplish all his aims in his first term. In his second term, sometimes referred to as the 2nd New Deal, he added four new alphabet agencies. The FSA - the Farm Security Administration - gave aid to tenant farmers, sharecroppers, and farmers who had lost their farms. The AAA - Agricultural Adjustment Act - made direct payments and controlled surpluses to stabilize farm prices. The NHA - National Housing Act - provided low cost public housing. The Fair Labor Standards Act established minimum wage, maximum work week, and child labor laws.

Impact of the New Deal: Roosevelt's New Deal programs had a lasting impact on the American people, the American economy and American government. Impacts included:

    Extension of the power of the federal government

• New Deal agencies rescued banking, industry and agriculture.

• New Deal program were extensive and permanent (FHA, AAA. FDIC, SSA)

• New Deal programs assured long-term stability of U.S. economy

• Government became employer of last resort/sponsor of work projects

   Extension of the power of the President

• Established the role of the President as a strong, executive leadership position

   Deficit Spending

• Spending more money than the government raises in taxes

• Priming the Pump - deficit spending to stimulate the economy

   Federal Social Programs

• Welfare State - government based on the view that the state is responsible for the economic security of its people

• Entitlement Programs that included Social Security, elderly, disabled, unemployed, handicapped, and dependent children

• Help people in their time of need, not permanent dependents of the government

   Greater Concern for Workers

• National Labor Relations Act of 1935

• Fair Labor Standards Act

• Right to join unions and bargain collectively

• Safer work places, right to company pensions, freedom from racial/sexual discrimination

   Conservation and Agriculture

• Soil conservation

• Dams to prevent flooding

• Reclaimed grasslands of the plains

• Protection of farms and farmers

   Renewal of faith in Democracy:

• "The only bulwark of continuing liberty is a government strong enough to protect the interest of the people, and a people strong enough and well informed enough to maintain its sovereign control over its government." (Franklin Delano Roosevelt)  

• Fireside Chats: FDR used radio broadcasts, his "Fireside Chats",  to tell people what was happening, and to explain these new programs. People all over the nation gathered around a radio and listened carefully. FDR's "Fireside Chats" gave them hope that things were going to improve. 

• By reviving the faith and strength of the American people Roosevelt ensured the U.S. would be strong enough to defend democracy should the need arise, and that the U.S. could survive a severe crisis without resorting to dictatorship.

The New Deal: Crash Course (video, youtube)

A list of some of the important alphabet agencies created as part of the New Deal, and what each was designed to accomplish:

Game: Great Depression and the New Deal, Matching Game

Quiz: The Great Depression and the New Deal Interactive Quiz with answers

Periodic Table of the New Deal

Huey Long

Franklin D. Roosevelt

Return to: The Great Depression for Kids

For Teachers

The New Deal for Teachers

See Also: The Great Depression