Analysis of Raunchway’s “Reflation and Relief”

Despite some of the challenges that Franklin Delano Roosevelts faced when drafting a plan to allow the United States economy to rebound from recession that plagued much of the 1930’s, he was successful in terms of his drafting the New Deal which was implemented in order to “make sure the Depression could not happen again.” This was the central argument that was presented in Raunchway’s Chapter 4, “Reflation and Relief,” which gave much credit to Roosevelt for lifting the United States out of the depression. A statistic that is presented that essentially gives credit to Roosevelt is that the “economy grew at averaged rates of around 8 to 10 percent a year” from 1933 to 1940 which was due to the obvious success of the New Deal. Raunchway presents some of the legislation that allotted success like the banking reforms and other legislation in order to aid the unemployed population that plagued the United States at the time. The empowerment of the Federal Reserve was a key example of this because with much of the blame being pointed at the banks, it was important for the government to step in and begin to stabilize and reopen the banks that had closed due to the depression. Roosevelt and the Federal Deposit Insurance Corporations (FDIC) did this by decreasing the reliance of gold in the United States’ economy along with decreasing the amount of money in regulation. This undoubtedly aided the economy in terms of decreasing the value of a dollar which made it “easier for indebted farmers to pay their creditors” or in more universal terms it allowed for the people of the United States to be able to make a liveable income once again. While some of the didn’t become permanent, it was evident that the United States had begun to take a turn from a laissez-faire economic strategy to a larger government controlled economy as seen by the New Deal “had more than doubled federal spending” marking one of the most significant moments in the United States’ economic history.