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What is the meaning of New Deal? Concept and Definition of New Deal


Definition, concept, meaning, what is New Deal

 New Deal

1. Concept of New Deal

Economic policy program put in place in the United States of America by President f. D. Roose-velt in 1933, with the aim of keeping the economy of their country of the situation of depression that had plunged him the great economic crisis of 1929. Composed of a set or not always coherent economic policy package, the New Deal tried to revive the American economy through the immediate help to the millions of workers who had been unemployed and who no longer could count on public support, even with private charity; a wide programme of public works
and long-term plans that motivated private investment to restore economic activity in the trade, industry and services was launched. The politics of the New Deal produced a remarkable increase of public spending and debt in the United States of America in the following years, but also a major relaunch of economic activity. The New Deal put emphasis on some economic ideas that were later systematized by J. M. Keynes in his general theory of employment, interest and money, published in 1936, as they were those of that in certain situations the State has to intervene to lift the economy from a situation of unemployment and that public expenditure should be increased when spending or private demand does not reach one sufficient level.

Appellation given by President Roosevelt to the economic policy carried out from March 1933 to counteract the economic crisis suffering United States since 1929. . New Deal.

(In English: New Deal)

A set of political, social and economic measures taken by the Roosevelt administration between 1933 and 1937 to remove us from the situation of depression that was since 1929. These measures include the creation of Social Security, recognition of trade unions, the setting up of a system of credits to agriculture and the creation of the SEC.

2. Definition of New Deal

The New Deal

Defeated the Republicans in the elections of 1932, the new President, Democrat f. D. Roosevelt designed a series of measures to solve the serious depression that the U.S. economy was mired.
The provisions implemented during the first 100 days of his term had continuity over several years and received the name of 'New Deal' ("new deal or new deal").
Actions aimed to put an end to the prostration of the more than 12 million unemployed Americans. So he considered priority boost demand and increase consumption as a means to revive production.
Two were essential in the New Deal sheds:

The economic

It addressed the following issues:


Greater control of the State over the banks (Banking Act of 1933) is boosted, and required an increase of its reserves in order to ensure their solvency. The granting of loans to business investment is stimulated. In addition the obligations federal law was passed in order to protect investors from fraud.
The dollar was devalued 41 percent against other foreign currencies to facilitate the export of American products.


The National Industrial Recovery Act of 1933 boosted subsidies to the industry with the objective of stimulating recovery. They were running huge projects of public works (roads, swamps, etc) through the Publics Works Administration, WPA (1935). The Agency collaborated with the Tennessee Valley Authority (1933), aimed at the colonization and industrialization of the Valley of the Tennessee River, initiative of a number of public companies through which were built reservoirs, power plants and extensive areas are reforested. This activity gave employment to more than 3 million workers.


Through the Agricultural Ajustment Act (1933 AAA) sought recovery from the field, being objective the decrease of production, since the overproduction that crawled from the Decade of the 1920s had sunk the prices and benefits of farmers. This reduction was achieved in Exchange for compensation received by farmers. The result that was obtained from the reduction of crops was the rise in prices. In three years, were double farm income.

The social

He took part in the following fields


Relations between employers and workers, regulating a minimum wage and the maximum hourly working were regulated by the National Labor Relations Act. The decrease in unemployment, the fixing of minimum wages and the trend to rising salaries, created a mass of employees with some purchasing power that increased demand at a time when the production was much needed stimulus.
Promoted a legislation to correct the most flagrant social inequalities of capitalism.
Through the Social Security Act, the first federal unemployment and pension insurance system was created.

Balance of the New Deal

While the purposes of President Roosevelt's break the recessive trend were met, the final balance of your plan not exhausted all of the objectives.
• Prior to the crisis of 29 activity never recover, this happened when intervention in the second world war forced the country to put in place all its energy production in order to meet the demand for war goods.
• The increase in public investment was extraordinary, but it was not so high on private initiative.
• Unemployment continued to remain high. In 1937 it was affected more than 7 million citizens.
• Fed suspicions of certain economic and political conservative sectors who saw in the New Deal too "socializadores" aspects that attacking the American tradition of free enterprise. In this sense, some of the main measures proposed by Roosevelt (as the Agriculture Adjustment Act) were cancelled by the Supreme Court.
However, the New Deal palió the effects of depression, recovered part of employment and created an atmosphere of optimism, non-existent since the crash of 1929. Roosevelt, his driver, won re-election to the Presidency on several occasions.

3. Meaning of New Deal

The New Deal or in Spanish "new deal" is the name with which the interventionist policy implemented in the United States between 1933 and 1939, by President Franklin Delano Roosevelt, intended to diminish the effects of the economic crisis, caused by the crisis of the 30, especially triggered the fall of Wall Street, and unresolved by his predecessorHerbert Hoover.
Many of its measures, typical of what is known as the welfare State, which counted with the skill and ingenuity of his Adviser, John M. Keynes, as the agricultural Adjustment Act, where the farmers that limiting their production would receive State funding, were declared unconstitutional.
The opposition was formed by the powerful, as measures affecting the rich classes who were harassed by large fiscal pressure, which sought to obtain resources for public works, which forced to reduce the scope of the program, however, reached to bear positive fruit, especially in the social field.
Basically between the measures it was sanitized banking; revive industrial activity; give credits for agriculture and subsidies; reactivate public works (roads, schools, dams, afforestation) and thereby generate employment; intervene in labour relations of patterns and workers, which was issued in 1935 the Wagner Act, or Wagner Act, Trade Union action-friendly; (e) increase the social security, unemployment, and old age protection and disability insurance.
The majority of the U.S. population supported the plan, and Roosevelt was re-elected three times, and ended his life in the exercise of power, in 1945.


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