Evaluate this claim: “The New Deal was a wise series of government actions that healed the problems afflicting the economy.”
This claim is false. The New Deal did not help anyone it just made things worse for our Economy. The New Deal was a plan made by Franklin D. Roosevelt. This has allowed the Government to harm our economy, which had also caused The Great Depression. I will write about two acts that are relevant to the new deal. The first one is called The National Industry Act. It was allowing industry to make production codes for individual companies. This included: minimum wages, price protections, hours of production, and production methods. This affected small and large businesses alike. However, they were not allowed to lower their prices. If businesses changed prices beyond the Act’s proscriptions, the businesses would be fined or have other penalties inflicted upon them. Another act was called the Agricultural Adjustment Act. The way the government would help the Agriculture businesses would be to raise crop prices. The governments way to do that was to destroy most of the crops. This also included animals. I learned that this method caused several million farmers to be out of work. Our country could not produce enough food to feed everyone. After World War I, and during the time the New Deal was proposed our economy was bad. After World War II, our economy was doing much better. Therefore, I have proved that the New Deal did not have a positive effect on our economy at the time and severely limited our liberty and freedoms by installing more government regulation thru these Acts. The New Deal may have alleviated some immediate problems, but it added trillions over the years to our National debt which in turn has made the United States much weaker and dependent on other Countries for our food goods and production items.
Critics have claimed that the housing boom and bust was a result of the market economy. Can you make a case that it was instead the result of government policy?
Yes, I can make a case. There are two government enterprises: Fannie Mae and Freddie Mac. These enterprises are supposed to help people make housing affordable by giving out loans. If these enterprises were ever in any trouble, the Government will come to their rescue. In 1977, the Community Reinvestment Act was created. There are three federal regulators who are responsible for this. The three federal regulators are: The Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Board of Governors of the Federal Reserve System. It was normally bank policy that loans would not be offered to people who lived in poor neighborhoods. No matter what job or how successful those seeking credit were the banks would not give out loans. When this law was enacted, the banks could give loans without concern for repayment, to those people in poorer neighborhoods. The banks were still looking at background information of credit seekers. However, this law changed in 1995 under President Bill Clinton. Instead of checking on people who have jobs or where they live, the government decides to say that they will give out loans with low interest rates to people whether or not they are in poorer neighborhoods. Interest rates were artificially lowered by the government. When the banks were allowed to replace well known banking principals, many people got loans and bought many houses. Most of the people who got these loans did not pay back the loans. The more loans and house shopping, the greater chance of artificial price fixing, artificial loan procedures, and a real housing bubble and following recession. Housing prices did rise. This stopped in 2008, because they got rid of the regulators in 1995. The other cause was that most of the people did not pay back the loans. When that happened people who bought these houses lost the houses. I had made the case of the housing boom and bust. This was no result of the market economy, but the result of government policy. This shows that there was government regulation in the year of 1995. Government regulation is not good because it takes away our liberty, freedom and money. This is the real proof and the real truth to all this.
This was my essay for Government 1B Lesson 80 I hope you enjoyed it.