DEFINITION of 'The New Deal'

A series of domestic programs designed to help the United States economy from the Great Depression. The New Deal was launched in the early 1930s, and was designed to bolster the United States economy, reduce unemployment, and instill confidence in the government’s ability to protect its citizens.

BREAKING DOWN 'The New Deal'

The stock market crash on October 29, 1929 – known as Black Tuesday – brought a period of roaring growth to a sudden halt. Companies and banks across the United States started failing, and the unemployment rate skyrocketed to the point that nearly a quarter of the workforce was unemployed.

Franklin Roosevelt launched The New Deal after taking office in 1933. The New Deal consisted of a variety of government-funded programs aimed at getting people back to work, as well as legislation and executive orders that propped up farmers and removed laws that prevented industries from being successful.

The New Deal is often broken into two segments. The “first” New Deal was launched during the first two years of the Roosevelt presidency, and focused on measures to stabilize the banking system (Emergency Banking Act), ensure bank deposit security (Banking Act of 1933), increase confidence in the stock market (Securities Act of 1933), as well as the more controversial National Recover Administration, which was designed to reduce price competition. The “second” New Deal introduced government-sponsored retirement plans (Social Security Act), increased government employment (Works Progress Administration), and minimum wages (Fair Labor Standards Act).

While The New Deal is credited with helping to end the Great Depression, it remains controversial in that it introduced a number of liberalizing reforms as well as an increasing government role in guiding the economy. Several New Deal programs were ultimately declared unconstitutional, and Roosevelt threatened to increase the number of Supreme Court justices in order to prevent future programs from being shuttered.

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