1. Impact of the New Deal

2. Spiral of Depression Demand drops
Fewer goods are sold
Companies cut wages and/or workers
Consumers loose confidence and start saving
Spiral of Depression

3. Spiral of Prosperity Government Spending Relief Programs More jobs
More spending
Demand for more goods
More production
More workers and wages
More taxes
Spiral of Prosperity

4. Opposition
New Deal programs had been in effect for 2 years and the economy was still sluggish, showing only slight improvement.
2 million jobs had been created but 10 million Americans were still unemployed.
“nobody seems to think any more that the thing [the New Deal] is going to work.”

5. Opposition Too many regulations on business
Federal government is too powerful – decrease in states rights
Too much deficit spending
New Deal programs had not gone far enough
Needed more government intervention in the economy to even out the gap between rich and poor
Called for heavy taxes on the rich

6. Opposition
Many New Deal bills did not pass congress and the Supreme Court struck down several laws/programs as unconstitutional. (example AAA)
Roosevelt feared the courts would strike down all the New Deal programs
FDR suggested all justices over 70 must retire allowing the president to appoint new judges who supported the New Deal.
Called the Court Packing plan
Political mistake – saw the president as trying to interfere with the checks and balances

8. Lasting Results
Despite government spending and relief programs the New Deal was only a limited success.
Unemployment remained high and recovery was not complete until WWII
Brought a change in the American public’s attitude toward government’s role.
safety net – a safeguard to protect them against economic disaster
Required a larger and more expensive federal government