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The Great Depression, 1929

The Great Depression, 1929. The Great Depression. At the lowest point of the Great Depression (in 1933), the national unemployment rate was: 4% 10% 15% 25%. The Great Depression. The Great Depression, which really began in 1929, lasted for: 2 years 4 years 12 years 15 years.

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The Great Depression, 1929

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  1. The Great Depression, 1929

  2. The Great Depression • At the lowest point of the Great Depression (in 1933), the national unemployment rate was: • 4% • 10% • 15% • 25%

  3. The Great Depression • The Great Depression, which really began in 1929, lasted for: • 2 years • 4 years • 12 years • 15 years

  4. The Great Depression • Between 1929 and 1931, what fraction of the nation’s private charity agencies were forced to close due to lack of funds? • 5% • 10% • 20% • 30%

  5. The Great Depression • At the lowest point of the Great Depression (in 1933), the national unemployment rate was: • 4% • 10% • 15% • 25%

  6. The Great Depression • The Great Depression, which really began in 1929, lasted for: • 2 years • 4 years • 12 years • 15 years

  7. The Great Depression • Between 1929 and 1931, what fraction of the nation’s private charity agencies were forced to close due to lack of funds? • 5% • 10% • 20% • 30%

  8. The Great Depression • In 1933, one-quarter of the US labor force was unemployed • The Depression lasted for 12 years, until the beginning of WWII • Between 1929 and 1931, 30% of nation’s private charities forced to close • GNP dropped from $103 billion in 1929 to $55.6 billion in 1933

  9. What was the Great Depression? • Speculation of 1920s led to sudden and severe stock market crash in Oct 1929 • Banking panic • Also severe drought throughout the 1930s devastated agricultural areas – known as “The Dust Bowl”

  10. Initial Response to the Great Depression • President Herbert Hoover slow to respond • Distrust of Federal government • Thought crisis would be short-lived

  11. A Changing View of Poverty and of Government • Catastrophic scale of the Depression shifted views of many to see that one could be poor as a result of a problem with the system rather than as a result of an individual character flaw • Only the Federal Government seen as able to respond to crisis of this magnitude, and criticism of Hoover was sharp

  12. Franklin Delano Roosevelt • In 1932 election campaign, FDR ran on the promise of a “New Deal” for the American people • Elected in a landslide victory and began to implement a set of programs that came to be known as the “New Deal”

  13. New Deal programs • Financial reform and regulation • Price controls in agriculture and industry • Federal provision of direct relief • Large scale public works programs • In 1935, Social Security Act passed to provide permanent social safety net

  14. The New Deal • Financial reform and regulation • Emergency Banking Bill (1932) • Retreat from gold standard • Price controls in agriculture and industry • Agricultural Adjustment Act (1933) • Labor laws to further limit child labor, maximum hours to workweek • Federal provision of direct relief • Federal Emergency Relief Administration (1933) • Public Works Programs • Tennessee Valley Authority (1933) • Civilian Conservation Corps (1935) • Works Progress Administration (1935)

  15. Why Federal intervention? • Scale of crisis overwhelmed local and state authorities as well as private charities • Despite prevalence since the Poor Laws of seeing poverty as rooted in individual failure – this crisis led to a shift toward understanding systemic causes of poverty

  16. Premises of New Deal policy • Belief in efficacy of the market system • Importance of balanced budget • Keynesian theory of effective demand (as opposed to supply-side economics)

  17. Social Security Act, 1935

  18. Social Security Act, 1935 • Old Age Insurance • Funded by designated tax pool • Universal safety net for all workers • Unemployment Benefits • Funded by employers • Time delimited relief to those who left jobs involuntarily • Aid to Dependent Children • Based on “Mother’s Pensions” programs in states • Intended to provide relief to families who had lost a “breadwinner” father • Basis of what we most often call “welfare” – a very small part of the whole system of social welfare – reformed by FSA

  19. World War II and Postwar Prosperity • Full employment due to war effort marked real end of depression • Elimination of New Deal work programs such as CCC and WPA • G.I. Bill of Rights, 1944

  20. Postwar Prosperity: Attack on public welfare • Shifting perception of adult recipients as unworthy • Shift from cash programs to service approach • Public Welfare Amendments, 1962

  21. 1960s: Battles for Rights and War on Poverty • Economic Opportunity Act, 1964 • Community Mental Health Act, 1964 • Food Stamp Act, 1964 • Social Security Amendments to add Medicare and Medicaid, 1965

  22. Review of History • Civil War: First federal intervention in Social Welfare Policy • Progressive Era (1900-1930): Regulation to protect people from the risks of industrial work • New Deal (1933-1935): Immediate relief and work programs for large scale systematic problems; continuation of regulation

  23. Review of History • Social Security Act (1935): Creation of a permanent safety net to protect people from risks of industrial society • War on Poverty (1960s): Creation of system of services to address individual deficiencies of the poor

  24. Review of History • Reagan Revolution (1980s): Limiting role of federal government to avoid negative consequences of individual dependency and economic stagnation

  25. 1970s-1980s:Economic stagnation and the Reagan Revolution • Shift to seeing government as the problem rather than the solution • Reagan fiscal policy based on tax cuts for wealthy and increased private investment (supply side or trickle down economics) • Overall diminishing role of federal government in social welfare provision • Retreat from rights based language

  26. 1990s: Bill Clinton • Attempt to create universal health care coverage failed • Personal Work Opportunity and Responsibility Act (1996) • Work requirements • Time limits • Shift from grant-in-aid to block grant

  27. Barack Obama: Change or More of the Same? • American Recovery and Reinvestment Act (2009) • Tax cuts • Federal relief, especially unemployment • Infrastructure projects – contract system rather than public works per se

  28. Barack Obama: Change or More of the Same? • Affordable Care Act (2010) • Individual mandate • Expanded public options • Employer mandate • Insurance companies required to cover people with pre-existing conditions and expand to young adults

  29. Today? • How do we see the role of the federal government in social welfare provision? Do we see government as the solution or the problem? • What are the major social problems of our time? • Do we think of poverty as rooted in individual character flaws or in systemic problems? • Which groups do we see as deserving of help? • How are gender/race/class ideologies connected to our social policy debates?

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