The Great Depression (Unemployment (Solution : The Creation of the Public…
The Great Depression
Solution : The Creation of the Public Works Administration (PWA) (1933-1939)
PWA was given $4 billion to spend on the construction of new public buildings.
"70 percent of the nations’ new educational buildings; 65 percent of its new courthouses, city halls, and sewage-disposal plants; 35 percent of its new public-health facilities; and 10 percent of all new roads, bridges, and subways. "
"In 1934, the economy grew 10.8% in 1934 and unemployment started to decline."
Problem: Sudden Rise in Unemployment
"By the end of , 650 banks had failed. In 1930, GDP shrank another 8.5%. Instead, the economy shrank another 6.4% in 1931, and 12.9% in 1932. By 1933, the country had suffered five years of losses."
By 1930, the unemployment rate doubled to 8.7%. It increased to 15.9% in 1931, and 23.6% in 1932. By 1933, unemployment was 24.9%. Leading to approximately 15 million people losing their job.
Solution: The creation of Shanty Towns/ Hoovervilles
Pop up communities known as Hoovervilles began to arise around the country offering cheap living to those being displaced by a loss of income.
"Nearly 6,000 shanty towns, called Hoovervilles, sprang up in the 1930s."
Problem: Homelessness due to a sudden lack of income in families
Due to rough economic conditions and the agricultural stress that came with the Dust Bowl many farmers found themselves without money and homes
"wages for those who still had jobs fell 42%. The Average family incomes dropped around 40% from $2,300 in 1929 to $1,500 in 1933."
Did the New Deals Fail or Succeed?
Failed: The New Deals, though helpful at the time were ultimately created too late. The real damage had been done and fixing the economic and political issues became just a matter of time. The programs that did work, such as the PWA, were only enacted for a short period of time and then dissolved at the beginning of WWII.
Succeeded: The stabilization and control gained over the national financial system, can be attributed to the creation of The Federal Deposit-Insurance Corporation (FDIC) and the abandonment of the national gold standard.
Can the New Deal be considered a turning point?
The New Deal policies established by FDR indicate the turning point in the depressed economy. With Hoover's presidency things such as Hoovervilles come into creation, named with scorn towards the president who was blamed for the Great Depression. Once the New Deal policies are put in place there is a noticeable rise in employment and income that go along with the creation of the New Deal programs, such as the PWA and organizations of that nature.