How Did the New Deal Work Out?

Since the administration is in the process of trying to "jump-start" the economy with deficit spending, it is useful to review how the policies of FDR actually worked out in terms of economic performance in the 1930s.  The New Deal was not specifically a "Keynesian" program, in part because Keynes' magnum opus, The General Theory, was not published until 1936. However, the New Deal is regarded by Keynesians as the ur-program of government stimulus of the economy. This chart shows what happened to GNP during the New Deal.  Its time scale, as is true for all the charts in this article, is from 1929 to 1941. The year 1929 was the last before the Great Depression began, and 1941 is the first year in which the buildup for World War II had a significant effect. War production during 1941 reflected the passage of Lend-Lease in March 1941 to supply the British, Russians, and Chinese. Pearl Harbor occurred on December 7, 1941. The year 1942 and beyond reflect the...(Read Full Article)