Economic Role in Shaping Actions by the Government in 1930-1980 Essay

Economic Role in Shaping Actions by the Government in 1930-1980 - Essay Example The economic history of this period of 1930 to 1980 will be testimony to this fact. The depression set in 1930s created challenging tasks for the government to undertake in order to find solution of the problem concerning economy and finance. Roosevelt was elected president in 1932 and he followed the principle propounded by Keynes, the British economist who believed that deficit spending during recessions and depressions could revive national economies. His theories became the basis of Roosevelt's New Deal approach. During first hundred days Congress and Roosevelt established many New Deal agencies, including CCC, FERA, CWA, AAA, TVA, and PWA to deal with the crisis.. In 1934 Congress created Securities and Exchange Commission (SEC) The president; immediately set to work creating New Deal policies to end Great Depression.In1933 immediately after taking the oath of office, He set out to provide relief, recovery, and reform in his programs known as the New Deal. In 1933 Roosevelt declared a five-day national bank holiday to close banks temporarily with the hope that a short break would give the surviving banks time to reopen with strong new breathe.. Congress also passed the Emergency Banking Relief Act, which gave the president the power to regulate banking transactions and foreign exchange. Congress passed the Glass-Steagall Banking Reform Act to protect savings deposits. The act created the Federal Deposit Insurance Corporation (FDIC), which insured an individual's savings of up to $5,000. The act was aimed to regulate lending policies and did not allow banks for investing in the stock market.Congress created the Civilian Conservation Corps (CCC), with a view to hire unemployed young men to work on environmental conservation projects throughout the country. Young and unemployed young men worked for small wage of thirty dollars a month, on projects in flood control and reforestation projects, national parks, and built many public roads. A lmost 3 million people worked in CCC camps. The program exited for 9 years during the crisis period to solve the problem of unemployment.Congress also created the Federal Emergency Relief Administration (FERA), to dole out roughly $500 million to the states. Half of this money was meant to bail out bankrupt state and local governments. The other half was distributed to people directly. FERA also created the Civil Works Administration (CWA) that helped generate temporary labor for others in need. The Social Security Act in 1935 was passed to help promote growth in employment. This law provided payments as "unemployment compensation" to workers who lost their jobs. The Act gave public aid to the aged, the needy, the handicapped, and to certain minors. These programs were financed by a 2 percent tax, one half of which was subtracted directly from an employee's paycheck and one half collected from employers on the employee's behalf. The tax was levied on the first $3,000 of the employee 's salary or wage. The government encouraged the creation of the Agricultural Adjustment