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Did the New Deal work?

The New Deal, Franklin Roosevelt’s wide-reaching programme of financial intervention and public spending, was the American government's response to the Wall Street crash of 1929 and the Depression that followed.

With a quarter of the workforce out of a job, and many reduced to queuing at soup kitchens, the US government initiated a series of huge public works projects which employed millions of Americans to build roads, maintain parks, and paint murals. Elsewhere, Roosevelt ’s government stabilised the banking system, reigned in competition and passed reams of regulation.

The New Deal certainly got people working again, but there are those who say it artificially inflated prices, strangled business with red tape and destroyed many private enterprises. Some believe it wasn’t until the Second World War that America was finally able to leave the depression behind.

Here in the 21st century, the Left is keen to use the New Deal as a blueprint for spending our way out of the global financial crisis. To what extent could Barack Obama and today’s leaders learn from the 1930s?

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