Is this a proven fact? Was the economy beggining to heal itself and if so, how?
thanks for any answers
From Wikipedia:
The "First New Deal" of 1933 aimed at short-term recovery programs for all groups. Based on the assumption that the federal government could solve the financial problems, the Roosevelt administration promoted or implemented: banking reform laws, emergency relief programs, work relief programs, and agricultural programs.
A "Second New Deal" (1935–36) was a more comprehensive redistribution of power and resources; which included: union protection programs, the Social Security Act, and programs to aid tenant farmers and migrant workers. TheSupreme Court ruled several programs unconstitutional; however, some parts of these were soon replaced, with the exception of the National Recovery Administration).
Several New Deal programs remain active with some still operating under the original names, including the: Federal Deposit Insurance Corporation (FDIC), theFederal Housing Administration (FHA), and the Tennessee Valley Authority(TVA). The largest programs still in existence today are the Social Security System and Securities and Exchange Commission (SEC).
In essence, the New Deal(s) created a forced monopoly and unnecessary regulations, rather than let the free market work it's magic. It was an intervention that tried to fix an intervention, namely the Federal Government giving fiat money creation and interest control monopoly to a central bank, the Federal Reserve.
solos:How exactly did the New Deal exacerbate the Great Depression? Is this a proven fact? Was the economy beggining to heal itself and if so, how?
The New Deal was a big increase in the size and power of government, which is always damaging to the economy.
Deficit spending stole from the average person via inflation, and the proceeds were used for the welfare state and big government projects.
This is the "broken window" fallacy. You see government employees doing things. You don't see the productive things they would be doing otherwise.
The bottom line is that an increase in the size of government is always bad.
The Great Depression was 100% caused by the Federal Reserve. The Federal Reserve kept a "tight money" policy until the start of WWII. The Federal Reserve intentionally created the conditions of poverty that allowed President Roosevelt to implement the New Deal and wreck the remnants of the free market economy.
I have my own blog at FSK's Guide to Reality. Let me know if you like it.
That's a bold claim, 100% is. Job protectionism on the part of Hoover and his pseudo-fascist connection to industry was as much responsible as anyone else.
Rob Murphy Thomas E. Woods has a good lecture on the FDR Myth and WWII "ending the Depression": http://mises.org/multimedia/mp3/Woods2/12.mp3.
Europe is Doomed ¦ Irish Liberty Forum ¦ Educational Pamplhelts
Besides additional taxation and regulation, you have to remember that government spending always "crowds out" private consumption, investment, and saving. When government employs more people, that labor is snatched from the hands of private enterprise that could use that labor much more efficiently. Likewise, when government provides unemployment benefits and welfare, that labor is snatched from the hands of private enterprise that could use it much more efficiently. Just the act of government spending either has to raise inflation (if money is printed), raise interest rates (if money is borrowed from private banks), or raise taxes (if raised from the populace). In all of these ways, government manages to create a destructive force upon the economy, funneling money out of its efficient operations and into inefficient government operations.
"There is only one innate right, freedom (independence from being constrained by another's choice), insofar as it can coexist with the freedom of every other in accordance with a universal law." - Immanuel Kant
The end of the war. Even though official statistics show a 22% drop in GDP between 1945 and 1947, the truth is that the end of the war allowed government spending to drop tremendously, previous soldiers (consisting of about 20% of the labor force at one point) were freed up to go back to the factories and other workplaces. Steel, cloth, concrete, rubber, coal, oil, and other resources that were usurped by the government were now available to private businesses. Consequently, even though we saw a fall in GDP right after WWII, we saw a huge leap in living standards as price controls were removed and private consumption and investment went through the roof.
Rationalthinker:Nicely expressed.... In your view, what factors ultimately contributed to the end of the depression? Thanks...
Hah, sounds like someone is writing a paper and trying to avoid reading a book or two. Anyway, my opinion on the biggest factor that helped end the depression was FDR's death.
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