The New Deal Spending Program in the 1930’s, Essay Example

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Essay

The new deal spending program in the 1930’s in the U.S. was purely pork barrel spending so that its effects on the macro economy were nil or negative. Analyze.

One cannot blatantly put away the dew deal spending of the 1930s initiated by Franklin D Roosevelt as ‘pork barrel’ spending; in fact it can be analysed for its good as well as criticized for its ‘pork barrel’ tinges. When Franklin D Roosevelt entered the office he was faced with the darkest hour of the “Great Depression” that was in effect. The legislative and economic reforms introduced by Roosevelt were known as the reforms of the new deal. The new deal reforms were expected to serve three main purposes, i.e. to provide “relief, recovery and reform”. To know whether the new deal spending were pork barrel or not will be based on the analysis of the above stated three objectives of the new deal emphasized by Roosevelt.

In respect of providing relief, the new deal spending was successful to most extent although it can be criticised that the relief that was provided was the relief for banks and other financial institutions while it was not so for the civilians who were offered other relief through employment. For the American civilians getting back to work was a great relief after four years of the depression. Agencies such as the “Civilian conservation corps” as well as “Works progress administration”, provided great relief for the unemployed. With regards to reform, the new deal spending was able to dilute American capitalism and inclined the state more towards an activism towards providing the civilians protection against the dangers of uncertain market environment. The national recovery administration was formed for securing the economic recovery. There was a great deal of increase in government’s role both in the societal affairs however the long standing prospects for the nation were not assured and hence the short term reforms were controversial for their short term impact.

The new deal spending can be criticized for the promised recovery as the promised performance lagged. The relief that was provided was only for short term and the promised long term structural reform was not realized. Moreover, the new deal spending also failed to end the “Great Depression” because even the unemployment remained high and also the economic stagnation remained the same. The recovery from the economic stagnation and unemployment came only with severe demand for mobilization as a result of World War II which demanded heavy employment and it also happened to be Roosevelt’s third term in office. Recovery was the most important objective of the new deal reforms and spending, however it was not fully realized and in fact theorists view it as failure. However, the new deal reforms were able to achieve structural stability to some extent.

There was more rhetoric than revenue in Roosevelt’s Wealth Tax Act that aimed at redistributing the wealth. Also, the fact that there was again a recession in 1937 demonstrates the criticism of the new deal reforms. There are also arguments calling the new deal spending as Keynesian deficit spending. Nevertheless, the new deal reforms and the spending cannot be termed as ‘pork spending’ attributed to the vast development that had taken place as the period has also been described as the “golden era of American capitalism”.

Works cited

Abbink, Klaus, Bernd Irlenbusch and Elke Renner. “An experimental bribery game forthcoming.” Journal of Law, Economics & Organization (2002).

Shughart, William F and Robert D Tollison. “On the growth government and the political economy of legislation.” Research in law and economics (1986): 111-127.

Ul-Haque, Nadeem and Sahay Ratna. “Do Government wage cuts close budget deficits? Costs of corruption.” International monetary fund staff papers (1996): 754-778.

Van Rijckeghem, Caroline and Beatrice Wedder. “Bureaucratic corruption and the rate of temptation: How much do wages in the civil service affect corruption?” Journal of Development Economics (2001).

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