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Coming out of the Great Depression

Coming out of the Great Depression. What to do now?. In your journals or on a sheet of paper, take the next 5 minutes to write down your response to the question: How much you think the government should be involved in your life?. What about during the GP?.

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Coming out of the Great Depression

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  1. Coming out of the Great Depression

  2. What to do now? • In your journals or on a sheet of paper, take the next 5 minutes to write down your response to the question: How much you think the government should be involved in your life?

  3. What about during the GP? • During the time of the Great Depression (GP), people were desperate for food, jobs, decent shelter. Two important questions to ask: • Who should fix economic problems? • How should they do it?

  4. What’s the Problem? What were the main problems to fix during the Great Depression? • High Unemployment • Inflation • Bank Failure • Homelessness/Hunger • Home & Land Foreclosures

  5. Herbert Hoover • Quaker from Oregon • Served in WWI. • Food Administration • Republican, 31st President of the U.S. • Elected in 1928 on promise to continue the prosperity of the 20s and end poverty. "We in America today are nearer to the final triumph over poverty than ever before in the history of any land."

  6. First Option:Volunteerism & Laissez Faire • Laissez-Faire – literally translated “hands free” • He thought that the economy would fix itself with time. Therefore, not much needed to be done. “the worst affects of the crash...will have passed in 60 days” - Hoover

  7. First Option:Volunteerism & Laissez Faire • Charities – Hoover urged people to donate, participate in, and lean on charities to help those who lost their jobs and homes “While people must not suffer cold and hunger, it must primarily be a local and voluntary responsibility.”

  8. Second Option:Classical Economist Approach • “Trickle-Down” Economics – states that in order to fix the economy, money and support must be given to business and large institutions (like banks) so that they can provide jobs

  9. Herbert Hoover Programs • Reconstruction Finance Corporation • The agency gave $2 billion in aid to state and local governments and made loans to banks, railroads, farm mortgage associations, and other businesses.

  10. Herbert Hoover Programs • “public works” – in an attempt to provide jobs, money was granted for construction projects like building roads, dams, and working on national parks • Ex. Hoover Dam

  11. More Problems • Bonus Army • over 17,000 World War I veterans, their families, and affiliated groups, marched in D.C. • They wanted immediate repayment for services as stated in the Adjusted Service Certificate Law • Hoover called the army to on stop the protest.

  12. America’s Response:Election of 1932 Election 1928 (Hoover) Election 1932 (FDR) Republicans Democrats Won by over 7 million votes!!

  13. America’s Response • The economy did not recover fast enough. • Many people thought that Hoover only cared about big business • The Republicans were blamed for the Great Depression

  14. Franklin Delano Roosevelt a.k.a “F.D.R.” • Born in New York in 1882. • Survived polio, but crippled for life • As Governor of NY, he worked to fix the economy within the state • Democrat, 32nd President of the U.S. • Won on a campaign promise of the “New Deal” to fix the economy

  15. Third Option:Government Intervention • John M. Keynes • Economist who said that when private business is at fault for an economic downturn, then the government must step in to fix it. • This became known as “Keynesian Economics” • Deficit Spending – when the government spends money it does not already have

  16. The New Deal: 1st 100 Days • Fireside chats – radios shows that FDR held to talk to Americans in order to give them comfort and hope.

  17. The New Deal: 1st 100 Days • Securities & Exchange Commission (SEC) • A government agency set up to regulate the stock market and prevent fraud

  18. The New Deal: 1st 100 Days • Federal Deposit Insurance Corporation (FDIC) • Institution that provided government insurance for bank deposits for up to a certain amount

  19. The New Deal: 1st 100 Days • Civilian Conservation Corps (CCC)– similar to the “public works” program. Provided construction jobs to citizens to build schools, roads, dams, etc.

  20. The New Deal: 1st 100 Days • Agricultural Adjustment Act (AAA) – raised prices for agricultural goods by buying or getting rid of surplus (extra goods)

  21. New Deal Programs

  22. Was the New Deal enough??? • These provided some relief, but did not fix the economy. • 20% of American were still unemployed

  23. Criticism • American Liberty League • Group of people who organized opposition to the New Deal. • Their Position: • Deficit spending is dangerous • Big Government is taking over

  24. The Second New Deal

  25. The Second New Deal • Social Security Act • Created an insurance system for the unemployed, disabled, and the elderly

  26. The Second New Deal • Work Progress Administration • Meant to create new jobs. Congress spent billions of dollars to build roads, buildings, etc. • This program also targeted people with special skill such as artists who painted murals, writers, actors, and musicians.

  27. The Second New Deal • Wagner Act/NRLB • Guaranteed workers the right to organize unions without interference and to bargain collectively

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