opic II: The New Deal, Social Spending, and American Economy Using Franklin D. Roosevelt's (FDR) New Deal, as a reference, what can social spending do for the U.S. economy? Social welfare spending is the highest spending category in the national budget. Why do you believe the government spends so much on social welfare? Can social spending cause inflation? When the economy suffers, so too can the U.S. credit rating. Explain what went wrong with the U.S. economy in 2008 and explain the term bubble