Franklin D. Roosevelt had promised a 'new deal' for the 'forgotten man' when he was campaigning for the presidency in 1932. The U.S.A. was then ravaged by a severe world economic depression: foreign trade had dropped to a third of its normal level, millions of persons had lost their jobs, and many banks had failed.

After Roosevelt became President he gave the term 'New Deal' to a far-reaching program, which took action to bring immediate economic relief as well as reforms for business and agriculture. The new administration's first objective was to alleviate the suffering of the unemployed. Within the first hundred days after the inauguration dozens of agencies were set up to dispense emergency and short-term governmental aid and to provide temporary jobs, employement and construction projects, and youth work in the national forests. The Tennessee River Valley Authority (TVA) undertook to provide flood control, hydroelectric power, and economic reconstruction for an entire seven-state area.

In 1935 the New Deal shifted to provide wider safeguards. The Social Security Act provided for nationwide systems of old age and unem-ployment insurance. Maximum hours and minimum wages were also set in certain industries in 1938.

Some New Deal laws were declared unconstitutional by the U.S. Supreme Court, but by 1937 Roosevelt had made enough new appointments to achieve a court majority favouring most of his measures. Despite resistance from the business community most of the New Deal reforms became a permanent part of the U.S.A. For the last 60 years the social safety net of the New Deal has cushioned the severity of the cyclical business downturns and prevented so far a repetition of a full-scale depression. (See also table Economic depressions since 1837

A renewed scepticism of large-scale government intervention led in the 1980's once more to far reaching deregulations. Like in the 1920's the slogan became again : 'Government is the problem, markets are smart', resulting in 2008 to a repeat of financial difficulties. This time the government acted more quickly with large financial government bailouts, reversing the economic philosophy of the last 30 years and a better appreciation of FDR's New Deal. But the huge accumulated government and privat debts made a repeat of the New Deal more difficult and the outcome has so far been uncertain.

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