How did the Great Depression shape the role of the federal government in the economy?

How did the Great Depression shape the role of the federal government in the economy?

The Great Depression significantly shaped the role of the federal government in the economy. Prior to the Depression, the government had a limited role in economic affairs, adhering to a laissez-faire approach. However, the severity of the economic crisis led to a shift in government intervention and the implementation of various policies to address the crisis. President Franklin D. Roosevelt's New Deal programs, introduced in the 1930s, expanded the federal government's involvement in the economy. These programs aimed to stimulate economic recovery, provide relief to the unemployed, and regulate financial institutions. The government established agencies such as the Securities and Exchange Commission (SEC) to regulate the stock market, the Federal Deposit Insurance Corporation (FDIC) to protect bank deposits, and the Social Security Administration to provide a safety net for the elderly and disabled. The Great Depression thus led to a significant expansion of the federal government's role in the economy, with increased regulation and intervention to prevent future economic crises.