Do We Need Another "New Deal?"

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The U.S. government has simply thrown money at our current financial crisis, rather than solving it. We should be reviving President Franklin Roosevelt’s New Deal policies, which eased the immediate crisis of the Depression and installed lasting solutions.

The New Deal was a three-part plan. It didn’t just fund problems; it found solutions. First, it truly regulated and stabilized the financial system by dividing it into risky, and non-risky parts. The government then backed only the non-risky, consumer-oriented banks. Second, it provided long-term economic stability to Americans through social security and other social programs. And third, it created jobs to build infrastructure and got people working again.

In fact, only the elements of the New Deal that haven’t been deregulated over the years have maintained some order in the current crisis. FDR’s creation of the FDIC to insure customer deposits has staved off a national run on the banks. And the social security system continues to offer payments to seniors and the disabled, saving what might have otherwise been a market swipe at their retirement.