This does not acknowledge historical complexity and other popular opinions. Government spending was diverted from large public work projects to military contracts. The idea that war stimulates the economy is referred to in economics as the "broken window fallacy." Deflation was the main problem with the economy because although prices dropped, no one could afford to buy goods because producers were laying off workers because their goods were worth less. This was mainly caused by banks calling back loans, reducing the supply of money (deflation). FDR helped limit bank closings by establishing the banking holiday, suspending banks to prevent them from closing and calling back loans. He also convinced people to stop saving money under their mattresses and redeposit the money in banks, causing healthy and stable inflation (which what governments generally do in recessions, including the US government during the Great Recession of 2008-2009).
The economy also grew because of his increased government spending, like with the creation of the CCC (Civilian Conservation Corps) that irrigated, planted trees, and built national parks.
FDR pulled the US out of the Great Depression with bank reform and government spending.
Answer:
Hoover's approach was to do nothing and let the problem fix itself. FDR's approach was the New Deal, which gave people jobs, food, money, etc.
Explanation:
