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Was the New Deal a success? Many believe it was, as it helped America overcome the calamitous stock market crash of October 1929 brought the prosperous 1920s to a dramatic end (Real GNP per capita fell by 30 percent between 1929 and 1933). The post-World War 2 era of prosperity is largely credited to the New Deal. However, a growing number of historians are challenging this simplistic narrative.

Was the New Deal a Success?

So if the New Deal didn’t get us out of the Great Depression, what did? Forced to acknowledge the failure of the New Deal, some people— including many professors—say World War II. It has become part of the conventional wisdom that World War II was a time of great economic prosperity in the United States, and even that the war rescued the country from the Depression. This is simply not true. If it were, then it might be a good idea to be at war all the time. Think of all the people we’d put to work producing raw materials, building planes, and assembling missiles.

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Historians have made much of the substantial production figures that were attained during the war. But most of this increase was due to the construction of armaments and military equipment and payments to military personnel. This production was not geared toward things that ordinary people needed. It made consumers worse off by diverting capital and other resources to goods that no consumer would want to buy. Between 1943 and 1945, some two-fifths of the labor force—including the armed forces, civilian employees of the armed forces, people who worked in the military supply industries, and the unemployed—was producing neither consumer goods nor capital goods. That was not all, of course; the tax monies of the remaining 60 percent went to fund the activities of the 40 percent that were not producing things consumers needed. All of this amounted to a dramatic loss of material wealth.

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"Was the New Deal a Success?" History on the Net
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March 28, 2024 <https://www.historyonthenet.com/new-deal-success>
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