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How did Franklin D. Roosevelt's New Deal programs "prime the pump" of American industry and consumer confidence?

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The stock market crash of October 1929 was effectively the beginning of a very new and important era for the United States. By 1932, US industrial output fell 54% and there was 25-30% unemployment. This was partially the result of lack of confidence in the economic and financial institutions of the country. This lack of consumer confidence led to a downward spiral as fewer factory orders were placed and more and more jobs were lost. In 1932, Franklin D. Roosevelt was elected president and tried to fix this downturn by introducing strong government regulation and a package of massive public works projects called the "New Deal". These were meant to re-employ Americans and to build a more modern infrastructure.

FDR's new deal programs "prime the pump" of American industry and consumer confidence in the following ways:

1. Two days after taking office, FDR issued a proclamation closing all U.S. banks for four days until Congress could meet in a special session. Ordinarily, such an action would cause widespread panic. But the action created a general sense of relief. First, many states had already closed down the banks before March 6. Second, Roosevelt astutely and euphemistically described it as a "bank holiday." And third, the action demonstrated that the federal government was stepping in to stop the alarming pattern of bank failures. This ...

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