How did the Second New Deal Differ

The first New Deal constituted of short-term relief measures targeted at agriculture, public works, business regulation and inflation. Though the reforms sought to alleviate the effects of the Great Depression, the first New Deal was unable to address the basic issue of unemployment and decreasing salaries which led to a weak consumer demand. The second New Deal sought to address this issue by increasing the consumer demand, a significant difference compared to the first New Deal.

The second New Deal leaned more towards Keynesian economics than the previous phase and aimed at introducing long term reforms which would be beneficial to the economy. The multiplier effect on the expenditure of the government towards the reforms was believed to be beneficial to the economy in the long run. An important program in this phase was the Work Progress Administration (Fishback, 22-28), which sought to provide work to the unemployed masses rather than just support them with welfare.

Work was provided in the form of construction of roads, parks, public buildings, airports and bridges. This helped increase consumer demand while improving the infrastructure of the country. Another significant policy was the introduction of the National Labor Relations Act of 1935 (Fishback, 22-28). This guaranteed collective bargaining for workers, outlawed unfair labor practices and led to the formation of the Congress of Industrial Organizations.

An increase in wages was observed among the workers, which shows the effectiveness of the act. The mainstay of the second New Deal is the Social Security Act (Fishback, 22-28) in which the responsibility for welfare in terms of long-term security was addressed. Funded for largely by taxes imposed on workers and industries, the act covered old-age pensions, unemployment insurance and categorical assistance to the blind, deaf, disabled and dependant children.

The second New Deal, as discussed, helped provide long-term relief measures, instilling a sense of sustenance and a belief in remission from the Great Depression among the people. Though the second New Deal did not solve the problems of unemployment, it helped increase the percentage of people who were employed. The second New Deal not only had long lasting effects and programs such as the Social Security Act and the Fair Labor Standards Act but also laid the foundation for ensuring future economic stability.

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