Repeating the past

Comparing Obama's plans to Roosevelt's 'New Deal'. Can learning from the past save the world from another Great Depression?

In 1929, The United States was at its peak: the richest and most content it had ever been. Prosperity, production and employment were at a high during the boom period that followed the 1st World War which became known as "the Roaring Twenties". Fast forward four years to 1933 and the economy had shrunk by a devastating 33%. Unemployment figures had risen to 13 million - 25% of the total labour force. In a relatively short time the richest economy on earth had been brought to its knees with severe repercussions for the whole of the western world.

The parallels between the Wall Street Crash and the initial stages of the current global recession are stark, yet it is hoped that a prolonged and desperate recession or depression in the same mould as that of the 1930s can be avoided. Obama's recent announcement of his multi billion-Dollar stimulus package bears a direct resemblance to Roosevelt's 'New Deal' package which, introduced in 1933, is widely credited with bringing an end to the Great Depression and putting millions of jobless Americans back into work. The scheme involved the implementation of massive public works projects across the country and was the most expensive government programme in the history of The United States. It was regarded as a massive success, so much so that by 1936 the US economy had more or less returned to the level it had been at in the late 1920s. President Roosevelt was reelected three times on the back of his success in turning around the economy.