When Franklin Roosevelt ran for president in 1932, the US unemployment rate was twenty-five percent. When he ran for a third term in 1940, the US unemployment rate was twenty percent. Contrary to the popular perception both here and abroad, FDR didn't pull the US out of its economic doldrums. Honestly, I'm not sure that any one person could have accomplished that feat.
The mad spending of the first thirty years of the twentieth century were paid for with borrowed money. For example, in 1927 you could buy tens of thousands of dollars of stock on a ten-percent margin (meaning you only had to have one dollar on deposit with your broker - who was not regulated by any Federal agency - for every ten dollars of stock you bought). Some of the "richest" customers (the ones with large paper fortunes) would not be asked to put anything down. So when the value of the stocks dropped twenty-five percent in one day, the investment institutions demanded repayment because they needed the money to cover their own losses.
Oops. The small to mid-sized investors didn't have the money, and they couldn't sell their stocks to raise the cash because no one would buy them at the prices they needed in order to pay their debts. So quite a few small investors and investment firms failed due to lack of cash. Then the state and local banks (again, not government regulated in those heady days) failed because frightened small depositors flooded their lobbies and demanded the money which they had deposited.
Oops again. The banks didn't have their money. They'd lent it out to people and businesses on thin interest rates with little collateral, and now the borrowers couldn't pay up. So the individual depositors couldn't pay bills, so the providers of goods and services couldn't stay in business because they couldn't get paid - the dominoes just kept falling. And the entire world spent the next decade paying the interest bill.
And then FDR came in and reversed the Hoover policies which were designed to have major corporations fund a national recovery via an early "trickle-down" effect. The effort didn't work because businesses correctly forecast that Hoover was not going to be re-elected and they wouldn't commit to any course of action without knowing what the next president would do.
FDR came in and began throwing programs at Congress like a desperate cook throwing spaghetti at the wall to see if anything stuck. Some of his programs worked well, some were moderate successes, and some just flopped, but even after seven years of this process, the world was just starting to come out of the depression.
And it was mainly because of military spending and military-related employment. Hitler in Germany and Tojo in Japan (and to a lesser extent, Mussolni in Italy) provided an impetus for government and private spending to meet the perceived threat. The recovery wasn't world-wide until about 1947-48, when Britain finally left wartime rationing behind, Japan adopted their postwar constitution, and the Marshall Plan had made good progress in rebuilding Western Europe.
We conveniently forget about FDR's failures, how the US Supreme Court made noises as if about to block many of the New Deal programs until FDR threatened to increase the size of the court from nine to fifteen (and they quickly fell into line), and how the US GNP didn't start taking off until people began building warships and tanks and combat aircraft and the US military began to absorb so many able-bodied young men.
If the Bush tax cuts go away, it will take money directly out of my pocket. It will also make it harder for some businesses to keep going, potentially throwing many people out of work. FDR's greatest contribution to the Depression era was the image of his unfailing confidence and jaunty spirit. He made people believe that things would turn around if we all just hung on a little longer. They did turn around, eventually, but it wasn't only because of Franklin Delano Roosevelt.
