how did democrats survive politically after the austerity measures of 1937?

fdr and the democrats were hugely popular after the new deal measures of roosevelt's first administration, which ended in march 4, 1937 (the last one to end in march -- the 20th amendment changed the data to january 20). but in 1937 they enacted austerity measures to rein in the deficit (sound familiar) and pushed the weak economy back into a tailspin.

fdr, i'm guessing, won his third term in part because his next election was in november 1940, and the nazis had already taken paris.

but how did the house and senate hang on?

Ouch!

but they had such large majorities they kept power:

http://en.wikipedia.org/wiki/United_States_Senate_elections,_1938
http://en.wikipedia.org/wiki/United_States_House_of_Representatives_elections,_1938

FDR and Congressional leaders spoke out loudly and publicly taking progressive stands on the issues, unlike the current crop of Third Wayers, and that managed to shift the popular ire away from the Dems.

Plus, even with the NRA and AAA removed, the federal gov't was run by an agenda that still far more Left than it is currently.

Finally, as others have pointed out, the party suffered large losses in the '38 elections but had a large enough majority to keep both houses.

the way out of our prior great depression was war and the economic boost that followed.

We are already engaged in several little wars so I can't think of a way out this time. Any ideas?

went all over the land. Now, war profiteers are the reason for the wars. The companies in the war business are thriving, taking huge profits, pallets of cash, no bid and one bid contracts, cronyism, and basically, war profiteers are in charge.
WW2 did not have more 'contractors' than enlistees, nor did it hire companies to do the food service, run the recreations, open a 7-11 in the war zone. No KRB, no Blackwater, none of that.
Current wars are run for the profit of a few, using the wallets of the many. That is so because of corruption at the highest levels.
Read this FDR quote and compare to the current verbiage:
"We had to struggle with the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.
They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob. Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me — and I welcome their hatred."

See how it works? Leadership is not capitulation to the opposition.

And I mean Massive, most of this was in the area between the cities of the time period and the older suburbs. Over lapping both the inner city and the older suburbs. Many of these roads are heavily used to this day (the best example of this was the Pennsylvania Turnpike, The State of Pennsylvania was converting an old never finished railroad bed to the world's first "Super Highway", FDR provided the funding to finish the turnpike so it could open in 1940).

Side note: The Turnpike in 1940 was between Harrisburg and Irwin PA, it expanded to the borders of Pennsylvania in the 1950s.

Second side note, Germany started its Autobahn first, but the PA Turnpike opened first, thus the claim that the Pa Turnpike is the first super highway.

side. Convinced them (the people) to let him try
things. The Politicians could scream and yell
and call him names, but the poorest of the poor
believed he WAS LOOKING OUT FOR THEM. When you
have the people with you, what else matters.

Our Party disdains populism today so the people
are left by the side of the road and the politicians
duke it out with each other.

as well as his reasoning directly to the American people. He said what he meant and he meant what he said. He did not spend much time telling the people that the Republicans and Banksters were our partners in bipartisan meetings in the middle, he advocated for the people. He had the trust of the American people, a force stronger than the current batch imagines it to be. They think they and their wonks have such power that the people's trust is irrelevant.
That's the whole of it. He did not call the opposition his honest broker pals. He did not spin and mince words, he did not purse his lips and lecture, he spoke his mind and he showed his heart, he had the courage to lead. The confidence and the ability to carry through on his words. He was not the man who had said 'no mandates because they are stupid' then 'we have to have mandates or you will cheat'. He was not the man who said 'any bill I sign must contain a strong public option' then claim he'd never said it. He was not the man who said the DOJ and other agencies would not go after medical marijuana, because they have better things to do like catching terrorists only to do just the opposite, apparently the DOJ and other agencies have captured all the terrorists, now they have time to go after chemo patient's meds.
FDR was an honest man, not a construct made of whatever verbiage is suitable for the occasion, true or not.

"He did not spend much time telling the people that the Republicans and Banksters were our partners in bipartisan meetings"

"he advocated for the people"..."He did not call the opposition his honest broker pals"

So many of us do not trust Obama because he appears to be sleeping with the enemy--the very people that we have spent our entire adult lives struggling to keep from destroying democracy, the country, and the planet.

It's like "Hey, we need to work with these evil people that want to kill you...listen, they're really not so bad."

If President Obama exhibited the characteristics of honesty and transparency, and stood for and spoke for we the people the way Bernie Sanders and Dennis Kucinich do, we'd all have his back.

Engaging in Third Way party politics is the absolute wrong way to win the trust and unwavering support of Democrats.

In 38, 3 million Americans were employed by WPA projects. 'Austerity' in the midst of a depression, when there are already large work projects that were not cut back, but expanded, is not anything like what is going on today, and it is insipid to suggest that it is.