History The Great Depression Questions Medium
During the Great Depression, several economic policies were implemented in an attempt to alleviate the severe economic downturn. Here are some of the key policies:
1. Expansionary Monetary Policy: The Federal Reserve implemented expansionary monetary policies by reducing interest rates and increasing the money supply. This was done to encourage borrowing and investment, stimulate economic activity, and combat deflation.
2. New Deal Programs: President Franklin D. Roosevelt's New Deal introduced a series of programs aimed at providing relief, recovery, and reform. These programs included the creation of public works projects, such as the Works Progress Administration (WPA), which provided employment opportunities and infrastructure development.
3. Agricultural Adjustment Act (AAA): The AAA aimed to stabilize agricultural prices and incomes by reducing surplus production. It paid farmers to reduce production and destroy excess crops and livestock, thereby increasing prices and supporting farmers' incomes.
4. National Industrial Recovery Act (NIRA): The NIRA aimed to stimulate industrial recovery by establishing codes of fair competition, setting minimum wages, and limiting production. It also protected workers' rights to organize and bargain collectively.
5. Social Security Act: The Social Security Act was passed in 1935 and established a system of old-age pensions, unemployment insurance, and welfare benefits. It provided a safety net for individuals and families affected by the economic crisis.
6. Smoot-Hawley Tariff Act: Although controversial, the Smoot-Hawley Tariff Act was implemented in 1930 and raised tariffs on imported goods. The intention was to protect American industries and jobs, but it ultimately led to retaliatory tariffs from other countries, exacerbating the global economic downturn.
7. Emergency Banking Act: The Emergency Banking Act was passed in 1933 to stabilize the banking system. It authorized the government to inspect and reopen solvent banks while closing insolvent ones. This helped restore public confidence in the banking system and prevent further bank failures.
These policies aimed to provide immediate relief to those affected by the Great Depression, stimulate economic activity, and establish long-term reforms to prevent future economic crises. While some policies were successful in mitigating the effects of the Depression, others faced criticism and had mixed results.