How did the role of the federal government expand as a result of the Great Depression?
The role of the federal government expanded significantly as a result of the Great Depression. Here are some ways in which this expansion occurred:
1. Economic Regulation: The federal government increased its regulation of the economy to prevent future economic crises. The Securities and Exchange Commission (SEC) was established in 1934 to regulate the stock market and prevent abuses that contributed to the crash. The Federal Deposit Insurance Corporation (FDIC) was created in 1933 to protect depositors' money in banks, and the National Labor Relations Act (NLRA) passed in 1935 protected workers' rights to unionize and engage in collective bargaining.
2. Social Welfare Programs: The New Deal introduced several social welfare programs to alleviate the suffering caused by the Depression. The Social Security Act of 1935 established a federal pension system for the elderly, unemployment insurance, and assistance to needy families. The Civilian Conservation Corps (CCC), Works Progress Administration (WPA), and National Youth Administration (NYA) provided employment and training programs.
3. Increased Government Spending: The federal government took an active role in stimulating the economy through increased spending. The WPA and other programs put millions of Americans to work on public projects like building roads, bridges, parks, and schools. These programs aimed to create jobs, stimulate consumer spending, and boost the overall economy.
4. Agricultural Policies: The agricultural sector was hit hard by the Depression, and the federal government stepped in to help farmers. The Agricultural Adjustment Act (AAA) of 1933 paid farmers to reduce production in order to raise crop prices. The Farm Credit Act was passed in 1933 to help farmers refinance their loans, and the Rural Electrification Act of 1936 aimed to bring electricity to rural areas.
5. Financial Regulation: The Great Depression highlighted the need for increased regulation of the financial system. The Glass-Steagall Act of 1933 established the Federal Deposit Insurance Corporation (FDIC) and separated commercial and investment banking activities. The Securities Act of 1933 and the Securities Exchange Act of 1934 increased oversight of the stock market and required companies to disclose information to investors.
Overall, the expansion of the federal government during the Great Depression aimed to provide relief, recovery, and reform to the American people while also bolstering the economy and preventing future economic crises.