Franklin D. Roosevelt & the Role of Government

Franklin D. Roosevelt served longer than any other American president.  He entered office in the midst of the country's most destabilizing crisis since the Civil War. The Great Depression created a sense of fear and desperation that shook the American people’s confidence in their nation’s political and economic institutions. Realizing this, FDR chose to confront the Depression "frankly and boldly, treating it not as a purely economic phenomenon, but as an insidious enemy.”



Franklin D. Roosevelt

Roosevelt believed that the governments' role in the economy needed to be much greater, to be an active instrument for regulating production, redistributing wealth, and securing economic equality with the objective of better serving the people. The American people needed help, and FDR wanted to raise taxes on businesses and the wealthy in order to provide direct relief to less fortunate Americans.   He felt that the government must change and take a far more active role in planning and regulating the nation's economy.

During the 1930s he instituted a large number of economic measures to provide jobs and public services that he felt would be beneficial to the nation.  This legislative agenda, nicknamed "The New Deal", created a huge federal bureaucracy to oversee the new programs.  "As I see it", Roosevelt laid out, "the task of Government in its relation to business is to assist the development of an economic declaration of rights, and an economic constitutional order. This is the common task of statesmen and businessman.".

 

Critics of FDR complained that the New Deal strayed too far from free market economics.  Some argued that Roosevelt's high rate of taxation (94% on top income earners) punished private investment and actually prevented the economy from recovering sooner.   But others, such as Huey P. Long, complained that the New Deal didn't go far enough in reforming the economy.

 

Economists and historians still debate whether the New Deal itself succeeded in sparking America's eventual economic recovery.  But it was undeniably instrumental in sparking an equally important psychological recovery. Roosevelt was able to maintain his popularity--despite the persistence of extreme economic hardship throughout his first two terms--by rallying the spirit of millions of struggling Americans and dramatically expanding the role of the federal government in their everyday lives.