Many libertarian economists argue in favor of laissez-faire economic policies. As a supporting argument, they often claim that Roosevelt's New Deal program actually prolonged the Great Depression. I'm a little skeptical about this claim. I somehow think that libertarians tend to state their opinions as the absolute and obvious truth...
So, is there a general consensus among economists regarding whether the New Deal helped to end the Great Depression? What are some of the evidence backing the libertarian side of the argument?
The is no evidence that the New Deal extended the Great Depression.
On the other hand, there are those who assert that the New Deal ended the Great Depression which is not true either. The Great Depression as we all know ended due to the increased demand of production of World War II.
There are those who think that the system needs to "clean itself" in order to rejuvenate and come back to full capacity. However, the system did let a lot of banks and companies go broke, so even if the argument was true, it does not apply, as the system let itself be "cleansed". There clearly was a lower equilibrium in production as were stuck without making investments for fear of lack of demand in a cycle that just reaffirmed itself. The deflation necessary to make everything cheap enough to increase demand could have taken a large number or years to achieve so it is by no means automatic that that adjustment would have taken less time without the New Deal.