Not so fast, there.
The New Deal wasn’t perfect, but to claim that on net it served to prolong the Depression is simply a bad joke, the last vestiges of a zombie Hooverism that refuses to stop stumbling blindly forward no matter how much evidence is fired into its slowly decaying corpse. Unemployment had reached over 24%. Yet the two UCLA professors cited claim “The economy was poised for a beautiful recovery”. It is to laugh.
Their argument mostly depends on the market controls that were instituted in 1933-34 (with a side note of some structural unemployment from the programs). And yes, those controls were likely counterproductive. But that wasn’t the whole of the New Deal. Monetary policy under FDR was a refreshing reversal from his contractionary predecessors, and he stabilized the banks with FDIC. And on top of that, his fiscal expansion was likewise the exact right course to take given the condition of the economy. No, FDR didn’t do everything right. He made some mistakes with market controls. And he didn’t end the Depression, either, but only because he didn’t go far enough with the beneficial policies. He stopped short with the job half done. It took a true Keynesian stimulus, sparked by the war, to get the economy moving again. But all things considered, Roosevelt did more good than he did bad. You can find dissenters to that view, even among professional economists, but they are clearly outgunned, largely because the idea is so completely ridiculous and stupid.
Roosevelt did not need to raise taxes because of the deficit. Looking at the yearly deficits, we see a crystal clear trend:
1929: 734
1930: 738
1931:-462
1932: -2735
**1933: -2602 Roosevelt takes charge
1934: -3586
1935: --2803
1936: -4304
1937: -2193**
1938: -89
1939: -2846
1940: -2920
1941: -4941 **War begins for America in December
1942: -20,503
1943: -54,554
1944: -47,557**
Roosevelt’s deficit spending was simply insufficient. He didn’t need to raise taxes and cut back on programs in 36. This was a clear and costly mistake on his part. His hesitation caused another slump in GDP and made the crisis last even longer. What the economy needed was to go balls out like they did in 42. They needed a massive increase in deficit spending, not the piddly crap that he’d been pushing around.
This isn’t wacky leftist nonsense from me. This is mainstream economic theory, reflected in the views of the clear majority of economists precisely because it matches the evidence so well. The New Deal was by no means perfect, but it also wasn’t the boogeyman that its detractors make it out to be. It had ups and downs, but the net effect was up.
Rysto has it right here. “Fiscal stimulus” is normally in reference to fiscal policy. It’s not an abnormally narrow definition to exclude broader govenrmental controls that characterized some other New Deal programs. Deposit insurance was also a part of the New Deal, but that wasn’t fiscal either. It was for monetary stability.