What is the proper government response to an economic crisis such as the Great Depression? Use evidence from the text to support your answer. ...

The worldwide economic depression that occurred after the first World War provoked varied responses in how countries around the world dealt with the crisis. The most effective approach, and the one that seemed to have the greatest effect, was that of the progressive democracies of Canada, Great Britain, and France. This system has come to be known as welfare capitalism. In the social welfare system, the government attempts to redistribute wealth through taxation policies and social welfare initiatives. The governments will collect taxes from profitable companies and individuals and then distribute the taxes to the needy in the form of healthcare, or social security/welfare programs of some type. This, in turn, offers a fairly reasonable distribution of power and wealth and creates the social stability that was not realized in countries that used other approaches.

The problems of unemployment, bankruptcy and hopelessness were somewhat fixed by the welfare capitalist economies. American president Franklin D. Roosevelt recognized the success of European countries that made social welfare reforms. He attempted to implement this model with limited success through his New Deal initiatives.