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The Contender
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The New Deal Worsened the Great Depression

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Voting Style: Open Point System: 7 Point
Started: 9/4/2011 Category: Politics
Updated: 6 years ago Status: Voting Period
Viewed: 5,421 times Debate No: 18168
Debate Rounds (4)
Comments (24)
Votes (2)




I argue that the New Deal worsened the Great Depression.

Con must argue that the New Deal HELPED END THE DEPRESSION...

So, Con CANNOT argue that the New Deal had no effect at all...

A Couple of Key Points that are NOT included in this debate:

1.) This is not about what ended the Great Depression, only about the New Deal's effect on the depression

2.)This is not about the value of the Social Welfare State and Regulations created by the New Deal, only on the effect of the New Deal on the Great Depression

3.) Monetary Policy is NOT considered part of the New Deal in this debate

The New Deal IS defined as the Economic Program of the Roosevelt Admin (Tax, Spending Programs, Welfare Programs, Regulations, etc.)...

WW2 was NOT part of the New Deal...

Here is the debate structure:

RD 1: Pro Sets Terms. Con Makes Initial Arguments that New Deal Helped End Depression.

RD 2: Pro Responds/Makes Arguments that New Deal Worsened Depression. Con Responds/Makes Arguments.

RD 3: Pro Responds. Con Responds.

RD 4: Pro Responds. Con does Reasons for Voting.

Con can make no New Arguments or responses in Final Round (to keep rounds equal)...

Read and Obey entire Terms!!!!!!!!!!!!



First of all, let me start off by saying that it is my job to give evidence that the New Deal not only did not hurt the economy during the great depression, but also improved it. Therefore the burden of proof is in my court. There are two major things we must look at to determine whether the New deal worked. These two things are the GDP and the Unemployment rate. We must also assume that these factors were not affected by the advent of World War Two. Therefore, to prevent any accusation of pre-war industrialization, any upturn in the economy must have happened before September 1939.

The first economic factor we must look at is the GDP. When the first new deal was signed in 1933, GDP was 56.4, the lowest it had been in recent US history. In 1939 it was 92.2. This is a significant upward change, which can be mostly, if not entirely, explained by FDR’s New Deal. Have it be noted that there was a small mini recession in 1938 that caused the GDP to drop from 91.9 (1937) to 86.1. 1

The second economic component during the great depression we have considered is the unemployment rate. There were two major indexes done on the unemployment in reference to those years. They are the Lebergott index and the Darby index. For the need to be conservative in my estimates I will be using the Lebergott index instead of the Darby, since the Lebergott did not count WPA workers as employed and Darby did. Therefore the first index had a higher average unemployment rate by about 5%. In 1933, which had the highest percentage of non employed people during the century, there was a 24.9% unemployment rate. This decreased to 17.2 by 1939. As an alternate reference Darby had estimated an unemployment rate of 20.6 in 1933, which was down 2.3 percent from the year 1932. In 1939 the unemployment rate was 11.3. As with the GDP the economy suffered a double dip recession in 1938 causing the unemployment rate to rise from 14.3 to 19% in the Lebergott index and increase from 9.1 to 12.1 in Darby’s index. In both studies the Unemployment rate dropped between 1938 and 1939. 2

Of course, these are not the only two factors that can determine economic success. Some of these factors include the stock market value (~100 in 1933 and ~130-150 in 1939, with the same dip in 1938)3, monetary value (38.8 in 1933 and 41.6 in 1939)4, Working wages while employed (1,165 in 1933 and 1,403 in 1939)5 wage with deduction for unemployment (565 in 1933 and 760 in 1939) 6, and the CPI (12.9 in 1933 and 14 in 1939)7.

Now, I could go on and on with statistics proving that the policies of Roosevelt helped the economy, but that would be eventually redundant. The question is why were Roosevelt’s policies useful? Probably, the most effective of his polices was the creation of programs such as the WPA and the CCC. These employed thousands of workers each month when the economy was rough. These programs in and of themselves were fairly useless as jobs.8 However, they gave workers experience to get hired, and money when they were not being hired. Even these programs, however, were not enough to help the economy slowly recover the way it did. It was only the collection of all of FDR’s policies that was responsible for this.

I want to finish this part of the round by saying that the New Deal was not perfect. There were programs that failed, and there were programs that worsened the economy. Also, the war had the greatest effect on the economy. However, to say that the new deal had NO effect or that it deteriorated the economy is, in my opinion, just ignorant of history. I would also like to thank jimtimmy for allowing me to debate him, and I hope that the debate goes well.



2; (page 3)

3 (Graph # 3)

4 (2010 reference year)

5 (column 2)

6 (column 3)



Debate Round No. 1


I thank my opponent for accepting this debate.

Why the New Deal Extended the Depression

The Great Depression was unique in that is more severe and longer than any other depression or recession in American History. This debate is not about what originally caused this Depression, but about what affect the New Deal had on the Great Depression.

The New Deal was the economic program that the Roosevelt Administration pursued in an attempt to end the Great Depression. It consisted of a variety of tax, spending, and regulatory measures.

Ultimatley, these measures led to a worsening of the Great Depression because they led to "Regime Uncertainty". Basically, private investment failed to make any type of significant recovery during the New Deal years. This can be attributed, largely, to a feeling of uncertaintly among investors.

As part of the New Deal, Franklin Roosevelt enacted numerous laws that edged on violating private property rights. This, on top of the strong anti-investor rhetoric of Franklin Roosevelt, led to a lack of willingness to invest on the part of private investors.

A 1939 Forbes Poll of Business executives shows that 64.8% of Business Executives. "The policies of the administration have so affected the confidence of businessmen that recovery has been seriously held back".

Numerous other New Deal polls show similiar results among Business Leaders.

Another key policy that hurt the economy was the artificially high wages that were set by the New Deal. The NIRA set extremely high wages in various industries, which kept unemployment high for years longer than it needed to be. UCLA proffessor Lee Ohanian researched the New Deal and found that New Deal policies, particularly the wage setting policies, extended the Great Depression by 5 years.

Even thought the NIRA was declared unconstitutional, Roosevelt was able to continue the wage setting policies through unions and other acts. This kept the unemployment rate artificially high for years.

Responding to My Opponent

My opponent bases his argument on the fact that Output increased and unemployment fell during the New Deal. He is correct about this, but it does not mean that the New Deal helped.

Economies tend to grow faster when recovering from Depressions. However, the Great Depression was marked by years of economic output well below potential output or trend. So, even though the economy grew fast, it didn't grow anywhere near as fast as it needed to get back to the pre depression trends.

The fact is that even though unemployment fell during the Great Depression, it still remained very high through the New Deal.

The fact is that the economy should have grown faster than it did during the Great Depression, just to return to the pre Depression trend.

I look forward to responding to my opponent's next set of arguments.




Eddiethehammah forfeited this round.
Debate Round No. 2


Don't know how this will end...

If, by chance, my opponent continues... I hold my second round arguments...


Why the New Deal Helped the American Economy Recover.

A response to my opponent’s arguments

My opponent is arguing that the New Deal’s attack on the private property rights of investors prolonged the great depression by a number of years. This follows that my opponent is arguing for the laissez-faire model of economics. In a sense he is arguing that the new deal, instead of helping the economy, worsened it. He proposes that the economy, if left to the private investors, would have recovered quicker.

There are a number of problems with this point of view. Firstly, the UCLA study. The study did not include people employed in the new deal programs, such as the WPA and the CCC. 1 The study also made the assumption that the economy, if not interrupted by the new deal, would have an economic growth rate simply not possible during the great depression.2, 3 Other studies suggested that the unpopular fiscal policies made into law by F.D.R were not as harmful as speculated in the UCLA study. 4, 5 Also, the view expressed in the paper is not universally accepted. There are many sources that show that the NIRA was not responsible for all of the wage increases in the 1930’s.6,7,8,9

Another thing I would like to address in my opponents arguments is that you say economies recovering from a depression/recession grow rather fast. This is just untrue. While smaller economic crises tend to recover slower, and larger tend to grow quicker, each and every economic crisis is different. In fact economies that experience a banking crisis, such as the great depression, tend to have an unnaturally slow recovery rate.10 The great depression also had to deal with other factors such as the dust bowl,11 and still had a generally quick recovery rate. In fact the recovery rate from 1933-1937 “was the highest seen outside of wartime. Had the U.S. not had the terrible policy-induced setback in 1937, we, like most other countries in the world, would probably have been fully recovered before the outbreak of World War II. 12 We have never had an economic downturn even proportional to the size of the great depression, so to say that every economic recovery is fast and the economy of the great depression would have recovered quickly unaided is not factually correct.

The final error that my opponent makes is assuming that just because some aspects of the new deal worsened the depression, the entire new deal worsened the depression. He assumes that the leading factor in employment was private investors. The Roosevelt administration at times employed nearly 15% of the unemployed men in the 1930’s. The WPA alone employed an average of 2000 workers a year. Furthermore, graphs comparing nominal fiscal development and real fiscal development show that during the 30’s fiscal policy played a role, however small, in increasing economic growth. This can only mean one thing. No matter how worried investors were, the fiscal policy that Roosevelt adopted worked in improving the economy.

Adding my own arguments.

During the great depression, the unemployment rate decreased nearly 9% in 6 years. Papers, except for a select few, have shown again and again that the new deal did indeed help shorten the depression. 4, 13, 14, 15, 16 Furthermore, just saying that businesses, after suffering the worst economic collapse in history, would just start hiring again, is just utterly ridiculous. Finally I would like to state that the great depression had the greatest recovery rate 33-35 in the history of the United State. One of the most interesting things is that Fiscal policy when viewed by a number of studies played an insignificant role in economic growth.13 It was monetary policy that played the biggest role. I am only mentioning this because this is what the studies that I have read proposed. I understand that my opponent does not wish to discuss monetary policy, but I would remind him that to criticize me on the mention of monetary policy as saying that I am arguing that I am including monetary policy in my arguments would be a straw man. Furthermore, the same study as well as one by E. Carry Brown, a study you may or may not be able to access, states fiscal policy was unable to rejuvenate the economy “not because it does not work, but because it was not tried.” These studies proposed that if the scope of Roosevelt’s fiscal policy was bigger, than the economy would have recovered more.

I would also like to state that there are studies pointing in all directions. The UCLA study, as well as some others can explain how private investors didn’t invest in the economy, thus making it worse. The real challenge is to determine which studies has the most evidence, and which side has more studies agreeing with it. After reviewing all the evidence I can collect, it is reasonable to say that the New Deal helped the great depression recover. As I stated before, some of the policies did nothing, and some policies hurt the economy, especially those that affected private investors. However, overall, F.D.R., along with the war, helped the American economy out of the great depression.

The Great Depression was, undoubtedly, the worst economic downturn we have ever seen in recent history. Hoovers policy was to leave the economy alone, thinking that it would automatically stabilize itself. Of course, it doesn’t take much knowledge to realize that this did not work. Once FDR came into office, he immediately began fixing the depression. He fixed the banks, eliminated the gold standard, and enacted the New Deal(s). This program was analyzed in later years, and found to be a major contributor in shortening the length of the depression. There are some studies claiming otherwise, but the majority of studies since the great depressions have come to the conclusion that without the New Deal, the depression would have been far more severe.






5 Page 10)

6 (page 46)

7 *

8 *





13 (pages 766-769 for monetary vs. fiscal)

14 *



*To access jstor papers, you can use your local library, institution, if you’re in one, or possibly high school. If none of these options are available, hopefully the abstract will provide enough information.

Debate Round No. 3


I thank my opponent for responding.

Defending My Arguments

My opponent did not respond to my central claim that Regime Uncertainty was a major factor in the length of the Great Depression. This seems to be because he mistakenly attributes the Regime Uncertainty argument the UCLA paper I cited. In fact, the Regime Uncertainty argument was put forward by Robert Higgs, an Austrian Economist.

I offered evidence from his research on this effect in my last round. Regime Uncertainty was my central argument that the New Deal extended the Great Depresssion. My opponent did not respond to any of the arguments. Which is too bad, because this is the last round of arguments/rebuttals.

The UCLA study did not look at Regime Uncertainty, it looked at the high wages policy of Roosevelt. My opponent says: "There are many sources that show that the NIRA was not responsible for all of the wage increases in the 1930’s.".

Thisis true... and the UCLA study looks at this. They actually point out that the post-NIRA union legislation continued the high wage policy that held back job creation.

Other than this, my opponent claims that other studies disagree with the UCLA study, this is true. However, he does not explain why these studies are superior to the UCLA study, making this point irrelevant.

My opponent also disagrees with my assertion that economies tend to grow faster when recovering from a crisis. In particular, he says that banking crisis's lead to slower recovery growth. This is not true. First, economies do grow faster during recoveries... This is a well known phenomenon. After all, it is easier to get back where you already have been than it is to go somewhere you have never been before.

As far as banking crisis go, one only needs to look at the banking-based depression in 1893. From 1892 to 1894, Real GDP fell by 5.62% per year. However, from 1894 to 1895, Real GDP grew by a rapid 11.43%. This was a banking crisis, and the recovery was rapid as it was from other types of recessions/depressions.

This brings me to my opponents point about high growth during the New Deal. The fact is that, as Lee Ohanian notes, we have every reason to believe that, absent the New Deal, we would have had even better growth. We had a crash like we had never seen before, and we would expect a recovery like we had never seen before.

I'm not arguing that the New Deal was all negative. But, on aggregate, it did more harm than good. The New Deal created great uncertainty and artificially high wages. This slowed down recovery.

Rebutting My Opponent's Arguments

There are far more than a "select few" studies showing a negative effect from the New Deal. And, my opponent asks this question:

" Furthermore, just saying that businesses, after suffering the worst economic collapse in history, would just start hiring again, is just utterly ridiculous."

What I think is utterly ridiculous is expecting investors and businesses to make long term decisions in an environment as uncertain as the one Roosevelt Created. Another note is that businesses have always started hiring again after even the most severe crisis's in history... without any government intervention...

As far as monetary policy goes, even Milton Friedman agrees that Monetary Policy was good during the New Deal, I wanted to debate about the controversial parts...

My opponent also gives a random survey of the literature and finds "After reviewing all the evidence I can collect, it is reasonable to say that the New Deal helped the great depression recover."

Of course, there is no explanation for why this would be...

Although it is not part of this debate, my opponent repeated the oft repeated claim that Hoover was a believer in laizzes faire. Anyone who knows basic history knows this is incorrect. Roosevelt actually accused Hoover of being a Socialist.

Saying Hoover was a believer in free markets is simply being intellectually dishonest.


I conclude by reminding my opponent that there will be no more debating after this round. I will ask that my opponent writes a quick something (perhaps a VOTE CON) to speed along the voting proccess.

I also will say that my opponent did not address my central point that Regime Uncertainty led to a slow recovery... And, my opponent did not offer any theoretical, or strong empirical support for his position. He simply pointed out that some economic indicators improved during the New Deal, causation was not established.

I also think that, given that Con forfeited RD3, conduct must go to me.... This is not to be rude, but just as a point.





Now, before I say anything, I would like to state that I did know that the UCLA study by Harold L. Cole and Lee E. Ohanian was a different study than Regime Uncertainty. I was going to address the points, however, due to time constraints I was unable to.

As much as I would like to address Regime Uncertainty, as well as some of the other claims that my opponent has made, I cannot. This is because I cannot add any new arguments to keep rounds even. Instead, I will give you several reasons why you should vote con.

There are four major voting areas in which I will try to convince you to vote for me in. These are grammar and spelling, conduct, arguments, and sources. Let’s start with grammar and spelling. I really don’t think that this field is very important, and I think that both my opponent and I had excellent grammar and spelling, so feel free to vote either way, or neither. Conduct I also leave up to you. My opponent states that because I forfeited round 3, due to significant time restrictions and a power outage that you should vote pro. However this is totally up to you.

This just leaves two areas; arguments, and sources. Both me and my opponent had great arguments, but I think that mine tops his for several reasons. Firstly he did not address several of my points, and then decides to straw man me instead of giving an in depth reason of why this is wrong. However, in his defense, I may have not been totally and absolutely clear on what I meant. Also instead of debunking my major arguments, such as the number of reliable papers that contradict the slightly flawed UCLA study, or that those same studies have said that the new deal helped the economy recover, he goes after small things such as some of the quotes I have made.

This leads me to the sources that we used. I personally think, although you may not, that I had not only more, but better sources hands down. All you really need to look at is the numbers. I had 11 economic papers, that my opponent made no attempt to critique, versus two economic papers, and three overall sources one of which was flawed in several ways.

Finally, I would like to thank JimmyTimmy for accepting me into the debate, as well as apologize for not posting round three, as well as taking long to post this round. As most of you probably don’t know, this is my first debate on this site, and I would much like any feedback on how I did, whether good or bad.

Vote as you see fit (Hopefully Con)

Debate Round No. 4
24 comments have been posted on this debate. Showing 1 through 10 records.
Posted by Eddiethehammah 6 years ago
Nah man its fine, don't worry about it. Stuff happens and its a debate. I really don't think that conduct, or any other voting category matters nearly as much as voting category 1 and 2. Thanks for the debate.
Posted by jimtimmy 6 years ago
I'm sorry about the Conduct thing. Normally, I would be fine with a forfeited round, but it would give me conduct. But, I forgot you had a power outage...

I actually feel pretty bad about this... I really wasn't trying to be dishonest...

So, everyone should decide on their own about conduct... Sorry again...
Posted by jimtimmy 6 years ago
Oh, and dont forget that rd 3 is the last round for Con... to keep the rounds even...
Posted by jimtimmy 6 years ago
np, Im kinda glad... Im short on time as well... we'll just cut this one round short...
Posted by Eddiethehammah 6 years ago
Look, sorry i didn't post this round... i was really busy, and then had a power outage :(. Anyways, the round should be up pretty soon, anyways sorry about not posting round 2 arguments, it just didn't happen.
Posted by jimtimmy 6 years ago

I dont think any thing you said violated the Monetary policy part of the debate... I am only talking about the Fed. The NIRA's wage setting policies, for example, are very relevant...
Posted by Eddiethehammah 6 years ago
Ya, i kind of blanked that. I will make a note in round two retracting the value of money, working wages (although i could make the claim that this is unrelated to monetary policy) and the CPI.
Posted by jimtimmy 6 years ago

K, thx


Good points, but, as I noted in my sets and terms, monetary policy is NOT part of this debate...
Posted by Eddiethehammah 6 years ago
please note that reference #2 does not work when you directly click on it. Instead you must copy and paste it into Google and click the first site.
Posted by sadolite 6 years ago
Correction: it will "receed" because of Govt. Not "proceed"
2 votes have been placed for this debate. Showing 1 through 2 records.
Vote Placed by U.n 2 years ago
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Total points awarded:00 
Reasons for voting decision: Rescinded vote.
Vote Placed by PartamRuhem 6 years ago
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Total points awarded:05 
Reasons for voting decision: Con wins for a number of reasons. Conduct: "However, he does not explain why these studies are superior to the UCLA study" then says "First, economies do grow faster during recoveries... This is a well known phenomenon." It's NOT a well known phenomenon. Practice what you preach. Con's forfeit, however, negates this. Tie. Con's argument in general was superior in the fact that he cited a larger variety of studies and addressed all of Pro's points, while Pro had a weak argument.