FDR's New Deal - And How a Short-Term Gain led to Long-Term Pain

In 1929, the world flew into chaos. After a decade of prosperity, the economic bubble just popped. Some desperate breadwinners became breadsteelers, and unemployment grew to 1 in 4.

And then the calming personality of FDR, or Franklin D. Roosevelt, burst onto the scene. Restoring the American confidence, he once said,

"The only thing we have to fear is fear itself."

However, the arrival of big government, particularly in the Great Depression, created just as many problems as it solved. While Regulatory Liberalism isn't entirely bad, I believe the motives and size it has grown to may be unfortunate.

I'll provide three points to argue the disadvantages of the New Deal. It was overcomplicated, expensive, and usury.

First, it was overcomplicated. FDR basically admitted that he was willing to try anything to cure the Depression. In his words, "There are many ways of going forward, but only one way of standing still." While this undoubtedly help restore confidence to the American people, it expanded the role, responsibility, and burden of the US government, creating extraneous agencies of government that are burdens to the present day.

Secondly, it was expensive and costly. Many historians acknowledge that Roosevelt actually extended the Depression. Additionally, he created many of the social security and Medicare taxes that bite people's pocketbooks to the present day.

Thirdly, FDR started the status quo of the Keynesian principles, which used the national debt exceedingly. As our national debt gets higher, our credit risk becomes more fragile, which will affect our borrowing powers, especially during wartime. This problem has grown worse and worse to the present day. (Although, to be fair, increasing the national debt did help us escape the Great Depression, and America is still on reasonably okay financial footing.)

So while I'm not an expert, it appears that the New Deal was a short-term advantage, although it hurt America for the future.

To learn more about basic economics, buy this brilliant, easy-to-read guide to economics by Richard Maybury.

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