The New Deal

The New Deal was a series of economic and social programs that were proposed by President Franklin D. Roosevelt in response to the Great Depression. The Great Depression was a worldwide economic downturn which began around 1930 and lasted into the early 1940’s. In general the Great Depression began in the United States following the Wall Street Crash of 1929. There are many theories as to what caused the stock market crash and subsequent Great Depression. Leading up to the Great Depression advances in industrialization made durable consumer goods easier to produce and more attainable. As goods became more attainable demand increased and the workforce swelled in order to keep up with demand. As the workforce increased the demand for durable goods and consumer goods further increased. Profit margins of the producing companies increased and people invested heavily in the stock market speculating that the trend would continue. Banks were investing in the market, lending to small investment companies and individual speculators so that they could invest in the market. The economic upturn and increase in workforce was propagated by the need for durable consumer goods which have a long lifespan. The need for durable consumer goods rapidly decreased as the workforce purchased the durable goods. Realizing that the market for goods had become saturated and the profit margins of the producing companies were unsustainable the stock of the companies rapidly devalued. There was a massive selloff of stocks on Wall Street, people withdrew their money from banks, and there was a worldwide run on the US Gold Market. Wall Street, the world economies, nor the governments of the world had anticipated the downturn.
Following the Wall Street Crash the economies of industrialized nations around the world contracted. Unemployment rose from just over 3.14% to 23.53% between 1929 and 1932. [1] The governments of countries around the world blamed each other….

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