How did FDR's New Deal save capitalism?

Question

Please name some specific programs

Answer 1

The stock market crash of 1929 portended a much larger problem with economics in the United States. The rush on banks created yet another problem leading to stock and banking failures.

Before the New Deal there were no brakes on the stock market or the banking industry. You put money in either and banks and stock brokers did what they pleased. Each game was rigged in different ways where certain people got rich but most that entered into the game midway through or late got the shaft.

The New Deal brought the Securities and Exchange Commission Act and introduced the Federal Reserve banking system with consequent banking and stock regulation. That also gave rise to the **** and FDIC to cushion stock and bank failures.

The government also reformed the way money was lent. In the past money was deposited and the bank lent that money to home owners who paid interest only on loans that ballooned in a short time. At some point the principal would be due in total.

The stock market traded on margins. Margin calls were so slim that often those who lost fortunes in the market had no equity to pay their debts if they liquidated.

Think of it this way. You couldn't borrow anymore than you could pay back on a wide margin.

If you borrowed money on your house, you paid it back over 30 years with installments that amortized your loan or lowered the balance a little each month up front and a lot each month towards the end.

Capitalism was saved because we could build more homes and industry could raise more capital selling stock in a stable market.

Also, taking the US off the gold standard made the dollar more flexible overseas and at home. It freed up reserves of gold for more important things than the domestic economy. THat was later changed by the post war Bretton Woods agreement and again by the Nixon Shock in 1971 when Nixon repudiated both the gold standard and Bretton Woods in favor of a petro-dollar exchange.

Any narrower explanation would require a number of volumes to answer.

Answer 2

The new deal didn't save capitalism. Capitalism didn't fail, the Federal Reserve failed. The Federal reserve began in 1913, and by 1929, had so disco-ordinated the economy, the economy needed more time to correct itself.
FDR was a socialist, he used the tools of 1913, 16th amendment, 17th amendment, and the Fed Res, to consolidate power, and reduce liberty.
WWII did much more to revive the economy than the New Deal!