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The New Deal Programs: Formulation, Funding, Advantages, and Disadvantages

The New Deal

The New Deal was a collection of programs, infrastructure projects, economic changes, and legislation initiated by the then President of the United States Franklin D. Roosevelt from 1933 to 1939. It was established to provide timely financial support from the Great Recession and to resolve critical changes in manufacturing, agri-business, income, water, employment, and housing (Lucas, 2018). The New Deal was introduced to aid citizens in the aftermath of the crisis. Importantly, most of those measures were implemented during Roosevelt’s initial 3 months in office (Lucas, 2018). These strategies greatly aided and encouraged American citizens, and as a result, the economy and the whole nation did flourish.

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The Deal’s Formulation

After Roosevelt realized that the unemployment rate had increased, he started considering new opportunities for people. For instance, short-term state aid and provisional work, such as in construction projects and conservation areas, contributed to boosting the economy and allowed individuals to have resources again (Lucas, 2018). The New Deal enabled the country to move forward and avoid a repeat of the recession’s financial problems and insolvencies. Moreover, corporations, agencies, and scholarships were established after the depression. The Securities and Exchange Commission protected citizens from deceptive monetary practices. Simultaneously, the Federal Deposit Insurance Corporation provided the government with security for financial institutions in the Federal Reserve System part banks (Lucas, 2018). For instance, the Agricultural Adjustment Administration regulated staple harvests by providing money to ranchers to increase prices. furthermore, the Tennessee Valley Authority acquired seven states to provide moderate electricity, prevent flooding, upgrade the highway, and generate nitrates (Lucas, 2018). The above initiatives centered on the corporate and the farming communities. Thus, they provided significant help to the involved populations, but then in 1935, the focus moved to the industrial and metropolitan classes instead.

The Deal’s Funding and Operations

During the crisis, new projects were subsidized by tripling national income levies. Incidentally, sales, individual, inheritances, corporate, and holding corporation taxes, and “excess revenue” duties all increased (Lucas, 2018). The New Deal established the National Labor Relations Board to give trade organizations more leverage. Additionally, the Industrial Recovery Act was implemented to improve the American public’s purchases by raising salaries and shortening working hours, leading to an increment in job creation (Marx, 2021). As a result, employees were offered the opportunity to seek work associations that they could join (Marx, 2021). In the run-up to this presentation, the judiciary had upheld administrators’ rights to prevent such unions’ establishment.

Before the New Deal, companies could terminate staff for becoming members of unions and directing them to sign a declaration not to join any workers’ groups. They also expected their workforce to take a specific position with the associations so they could keep an eye on them and be able to stop organized labor before it began (Marx, 2021). Even though the U.S. Supreme Court ruled that specific regulations were unlawful, Roosevelt nevertheless helped to change the American people’s lives economically and socially. Additionally, Social Security was launched for the welfare of the aged and widows, unemployment benefits, and insurance for the disabled (Marx, 2021). The body was created to assist individuals when they retire, get disabled, or even die, while minimum wage and a limit on working hours were also established (Marx, 2021). Moreover, employees were often covered by insurance against risks at their workplaces. Therefore, the New Deal brought the nation back together, boosting the economy, and community interactions, and giving people a better living standard.

The Importance of the New Deal

In the short term, the initiatives did aid in improving people’s lives during the depression period. In the long term, the reforms established a standard for the national government to play a central role in the country’s socio-economic welfare (Lucas, 2018). For instance, the new state agencies tried to regulate farm production, control wage rates, and prices, and set up a large economic stimulus package for the jobless (Lucas, 2018). The programs tried to deal with the recession by offering work for those willing to do so to assist the old and the disabled and offering employment. The initiatives also strived to reduce the burden mostly on the age, providing support to farmers and giving employees new and better rights (Lucas, 2018). Thus, after 3 years of persistent economic adversity, the citizens had to deal with the harsh situation. Therefore, while these programs could not stop the recession, they successfully rebuilt public trust and introduced new services that helped millions of people.

The Disadvantages of the New Deal

Although the New Deal was a positive initiative and had its advantages, it was also associated with some disadvantages. For example, the unemployment rate increased significantly as the President did not adequately address job problems. The nation also failed to recover from depression as Roosevelt could not persuade his followers of the need to improve the Supreme Court’s organization to prevent it from resisting his proposals (Lucas, 2018). Finally, African Americans got relatively little benefit from the whole process.


The New Deal was a progression of policies and projects launched during the Great Economic Crisis, and it was aimed at restoring American prosperity. When Roosevelt assumed power in 1933, he moved quickly to stimulate economic growth and provide employment and compensation to those struggling. To some degree, the plan appeared to address some of the citizens’ social and economic issues. Besides, the arrangement was not entirely effective in controlling inflation, as there was some opposition from other sides and the President’s party itself.

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Lucas, S. (2018). The New Deal: A global history. International Affairs, 94(3), 660-661. doi:10.1093/ia/iiy062

Marx, J. (2021). Great Depression: American social policy.

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