There is much debate about whether it worked or not, but I find this bit of information interesting, from the BBC:
Part of the interesting parts to me is that FDR attempted to balance the budget even while implementing new programs during the first New Deal anyway. Obama hasn't even given this a second thought except to say that we're going to be dealing with multi-trillion dollar deficits for years and years. And while he's quite keen on pointing out how the deficit doubled over the past 8 years, what he's not saying is that he stands poised to double it again with the passage of this new bill. Of course, it won't look at bad on the books because the bill only allows for less than $50 billion to be released in the next year. I thought Enron got in big trouble for cooking the books like that?
I also found it interesting that The New Deal came at the same time as the end to Prohibition. Alcohol production, distribution, and serving is a BIG industry, and that has to account for at least some of the drop in unemployment numbers. Obama really has nothing of that sort to fall back on, although it seems he's trying to do that with the new energy stuff. Which is all fine and good, but if part of those 4 million new and saved jobs come from the new energy sector, how does that account for the jobs lost in the traditional energy sector? Ending prohibition created a ton of new jobs where there were none (legal anyway) before.
It also goes to show that very little has changed in Washington. One party will blame the other for political reasons:
|The Roosevelt Administration was under assault during FDR's second term, which presided over a new dip in the Great Depression in the fall of 1937 that continued through most of 1938. Production declined sharply, as did profits and employment. Unemployment jumped from 14.3% in 1937 to 19.0% in 1938. Keynesian economists speculated that this was a result of a premature effort to curb government spending and balance the budget, while conservatives said it was caused by attacks on business and by the huge strikes caused by the organizing activities of the Congress of Industrial Organizations (CIO) and the American Federation of Labor (AFL).
Roosevelt rejected the advice of Morgenthau (Treasury Secretary) to cut spending and decided big business were trying to ruin the New Deal by causing another depression that voters would react against by voting Republican.
But yes, there is great debate on whether any of The New Deal (part 1 or 2) actually worked, or if other factors had more responsibility in the recovery. When you look at the employment numbers, and the major increases in employment corresponded directly with our involvement with WWII (in support of the Allies from 1939 until our involvement in 1941, with a sharp increase in employment and the end of The Depression), the correlation seems pretty apparent. But this part struck me most about the effectiveness, when looked at in an economic perspective vs. historic perspective:
|A number of economists believe the New Deal delayed economic recovery. A 1995 survey of economic historians asked whether "Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression." Of those in economics departments 27% agreed, 22% agreed 'with provisos' (what provisos the survey does not state) and 51% disagreed. Of those in history departments, only 27% agreed and 73% disagreed.|