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The Great Depression ushered an era of economic hardship the Ilkes of which was unparalleled by the rescission of 2008. The economic crisis was also followed by a rise of social injustices such as racial segregation and rise of groups such as the KKK; only worsening the situation, especially for African Americans. Though the UK of 2008 did not experience an abundance of bread lines, shanty towns or mass migration similarities are still clear, both crises shared the catalysts of a crash In the banking sectors and an uneven spread of wealth. Also, In both situations a time of prosperity as followed by an Immediate and unexpected decline.
It Is true that the scale of the problem was not shared, but the similarities mean that there are crucial lessons which could have been learnt and which I believe are being ignored. To being, the welfare provided by the UK was arguably one of the most important barriers we had against the British people feeling the same hardships of the 1930s America. Also, Roosevelt, who was the president at the time and is to this day praised for his handling of the depression, offered America a radical solution (The New Deal), which ffered welfare and supported those most In need and worst hit by the recession.
Despite such a policy requiring an excess of fiscal spending, the help that such initiatives brought to the people not only help the weather the storm but also allowed people to function effectively within a recovering economy. Despite the proven relief that the welfare brings toa recovering economy and people that function within it, its existence Is being challenged during the recovery stage of the 2008 recession by cuts which are Increasing the suffering of an already troubled population. The New
Deal consisted of three maln alms: Relief, Recovery and Reform. The relief effort aimed to assist in the removal of poverty, provide food for the starving and intervene to stop people from losing their homes. The Recovery effort ensured that the economy was boosted so that people could be given jobs. Lastly, the reform effort made the essential changed needed so that America could avoid such a tragedy in the future and once again start growing without the need for the risk that comes with speculation which was abundant at the time.
To fulfil such tasks Roosevelt set up agencies which dealt with specific Issues. For example, The ccc (Clvlllan conservation Corps) worked to offer jobs such as conservation projects for men of ages 18 – 25, as well as temporary agencies which offered relief such as FERA which provided financial help for the unemployed. Such agencies were even crucial in dealing with fundamental Issues such as the drought which ravaged an area Southern America to such an extent that it was called the ‘dust bowl’, For example the TVA manufactured and distributed fertilizer.
Eventually the TVA covered 104,000 square kilometres with a population of seven million people, It was a proven success. Though most of the agencies that were deployed during the years of recession are not relevant today, the principle that they represented are, these are principle of government for the people, that when government policy fails and such economic problems manifest, it is up to the government to offer an initiative which balances the crucial sacrifices needed for One aspect of the recovery Roosevelt offered was deficit spending.
In a method which was referred to as ‘priming the pump’, money was put into the economy so the hardest times were easier to bare, and accordingly, the consequences could be easily ealt with during more prosperous times. Despite the method being hugely inefficient seemingly it worked, the biggest recession to this day lasted for only four years (1929-1933) after which during the years of the new deal the American economy started to improve.
Before the crash America’s GDP was $103. 6 billion, the last year before the new deal it dropped to almost half ($56. 4 billion) . During the years of the New Deal the GDP once again rose to $92 billion. Till this day the efforts of Roosevelt are praised with the President Obama remarking “It will require common ffort, shared responsibility, and the kind of bold, persistent experimentation that Franklin Roosevelt pursued during the only crisis worse than this one. Yet it seems that his methods are not even being considered by some of the governments today. It is true that we do not have the leadership of Franklin D Roosevelt, yet we have his policies and examples. We also have a rescissions similar to the one we face today, one which was successfully overcome, therefore we must look at our history and learn from it, especially if the problems are not new.