By: Kayley Bell
In 2019 a new virus was discovered, first appearing in Wuhan, China. It was initially declared an epidemic when there is a sudden increase in cases, but it was soon classified as a pandemic by the World Health Organization in March of 2020. As of March 4th, 2020, there have been 28.8 Million cases and 519,000 deaths caused by this virus, Covid-19, in the United States. From March to April of 2020, “43 governors issued orders directing residents to stay at home and nonessential business to close…” This caused over 20 million Americans to lose work. As a result, the citizens called upon the government for assistance and intervention. Over the last year, Congress has proposed and passed multiple stimulus bills to stimulate the economy and help struggling families and businesses stay afloat. In order to understand the stimulus bills, it is essential to understand their historical context.
Prior to the Great Depression, the United States underwent two significant periods of time: World War I (1917-1918) and the Roaring 20s. WWI started in 1914 when the heir to the Austro-Hungarian throne was assassinated by a member of the Black Hand, a Serbian terrorist organization. This incident was further ignited when the two nations, Austria-Hungry and Serbia, declared war on each other, and their allies followed. This did not include the United States until 1917, which was pulled into the war based on economic ties. The time from the start of the war to the United State’s entrance was an era of booming manufacturing for the U.S., as the waring nations purchased supplies and armaments. This prosperity continued after the war. This period was known as the “Roaring 20s”. The Roaring 20s came to a somber end with the collapse of the stock market on “Black Tuesday”, October 29, 1929. This occurred during President Herbert Hover’s administration. The nation then went into a downward spiral, with unemployment rates reaching 23% in just 3 years. This era of economic desolation, unemployment, and low quality of life was known as the Great Depression. The Presidential election of 1932 was between President Hoover, who was blamed for the devastation of the depression, and Franklin Delinore Roosevelt (the distant cousin of former President Teddy Rosevelt). Franklin Roosevelt campaigned on a “New Deal.” Winning the election, the New Deal policies of FDR’s administration set precedents for the current Covid-19 relief legislation.
Some of the New Deal policies included the declaration of the bank holiday, introduction of the FDIC, the Truth in Securities Act, and the SEC. The FDIC is still in place today. It backs up banks; if an FDIC-insured bank were to fail, the FDIC will repay the investors back to a limit. In addition, the Truth in Securities Act improved faith in the stock market by increasing transparency for investors, and the SEC acted as the ‘watchdogs of the market.’ Organizations such as the Civilian Conservation Corps (CCC), Works Progress Administration (WPA), and the Civil Works Administration (CWA) provided much-needed employment. In 1935 the Social Security Act was put into place. This created the Social Security program, functioning as a sort of insurance in case of unemployment. It provides, as it is still in effect today, income for people ages 62 and older. These policies of government interventionism set new precedents that had not been seen in previous legislation, building the foundation for government interventionism in the current Covid-19 Pandemic.
Work Cited
- The American Pagent, by David M. Kennedy, 16th ed., pp. 742–766.
- “History of Stimulus Packages.” Center Forward, 30 July 2020, center-forward.org/history-of-stimulus-packages/.
- “How Does a Pandemic End?” Avera, www.avera.org/balance/infectious-disease/how-does-a-pandemic-end/#:~:text=COVID%2D19%20was%20declared,the%20World%20Health%20Organization.
- “Identifying the Source of the Outbreak.” Centers for Disease Control and Prevention, Centers for Disease Control and Prevention, www.cdc.gov/coronavirus/2019-ncov/cases-updates/about-epidemiology/identifying-source-outbreak.html#:~:text=The%20new%20virus%20was%20found,classified%20as%20a%20pandemic.
- The New York Times. “Coronavirus in the U.S.: Latest Map and Case Count.” The New York Times, The New York Times, 3 Mar. 2020, www.nytimes.com/interactive/2020/us/coronavirus-us-cases.html.
- “States That Issued Lockdown and Stay-at-Home Orders in Response to the Coronavirus (COVID-19) Pandemic, 2020.” Ballotpedia, ballotpedia.org/States_that_issued_lockdown_and_stay-at-home_orders_in_response_to_the_coronavirus_(COVID-19)_pandemic,_2020.
- Wires, News. “More than 20 Million Americans out of Work Due to Covid-19.” France 24, France 24, 16 Apr. 2020, www.france24.com/en/20200416-more-than-20-million-americans-out-of-work-due-to-covid-19-pandemic.