In domestic policy, the early proposals for the expansion of the federal government into the social and economic sphere came from progressives, populists and socialists like Eugene Debs. Starting with Woodrow Wilson and Theodore Roosevelt, Progressives and New Dealers borrowed part of the socialist platform, including old-age pensions, national health care, public housing, women’s suffrage and an income tax but not its broad-reaching plans to nationalize American industry and finance. Although the New Deal stabilized the economy and brought about some degree of economic recovery, the Depression did not really end until World War II. In the 1960s, the Great Society of Lyndon Johnson—a young protégé of Franklin Roosevelt who was determined to complete the New Deal, expanded the role of the central government with federal aid to public education, Medicare and Medicaid, as well as the Civil Rights Act of 1964 and Voting Rights Act of 1965. These programs remained in place despite conservative opposition and cutbacks during the Ronald Reagan era of the 1980s. During the same period, the U.S. also became a global superpower, particularly during and after the Second World War in 1939-45, which it definitely had not been prior to that time.
In the 1920s the U.S. produced more consumer goods than its economic base could absorb, and so it remained until the expansion of the mass market and new middle class after 1945. In creating the modern welfare state, though, and accepting the role of organized labor in American economic life, the New Deal laid much of the groundwork for this postwar expansion. Franklin Roosevelt was a highly charismatic political leader who communicated very successfully to a mass audience through radio. Among the many durable accomplishments of the New Deal, the Social Security Act and National Labor Relations Act were perhaps the most important and durable, along with agricultural subsidies, the Tennessee Valley Authority, the minimum wage and eight-hour day. At the time, the U.S. also adopted the policies of John Maynard Keynes, who argued that capitalism did not produce full employment in the absence of fiscal and monetary stimulus from the central government, which would increase aggregate demand. His General Theory (1936) was a product of the Great Depression which called on governments to use deficit spending to stimulate investment and consumption, and by the 1960s even Republican presidents like Richard Nixon claimed to be Keynesians.
Woodrow Wilson envisioned a liberal capitalist world order of free trade, open diplomacy, and international organizations like the League of Nations, and this became the dominant philosophy in U.S. foreign policy. America had been poorly prepared for war at the outset of World War I in 1914, with a tiny peacetime army of only 150,000 troops. It only joined the war three years later, but quickly trained and transported an army of two million troops to France, which proved decisive in defeating the Germans on the Western Front. In 1918 Woodrow Wilson addressed Congress to lay out his plans for a postwar settlement in the 14 Points. In addition to calling for the abolition of the German, Ottoman and Hapsburg Empires and the liberation of subject peoples in Europe—although not in the British, French and American colonies. Although the U.S. Senate refused to participate in the League or the global system after World War I, Wilsonian internationalist ideas have remained influential down to the present.
Only after the great victory in the Second World War in 1945, which ended the Great Depression and made the U.S. the strongest economic and military power in history, did it fully assume the global role that it retains today. From the 1940s to the 1970s, American industrial, technological and economic might was basically unchallenged, and this ensured that the country has a much larger middle class than ever before or sense. Once again, government programs like loans and subsidies for suburban homes through the Veterans Administration and the Federal Housing Administration (FHA) and the construction of the interstate highway system in the 1950s and 1960s had a major social and economic impact on the country. By the 1970s, the majority of the white population lived in suburbs rather than inner cities or rural areas, which had not been the case in 1940.
The U.S. became the world’s first nuclear power in 1945, and not since that time has there been another clash between any of the imperial powers, although they came close during the Korean War of 1950-53 and in the Cuban Missile Crisis of 1962. Ever since the late-1940s and 1950s, however, Japan, Germany, Britain and France have been allied with the United States, and although this alliance has had strains over the decades, nothing has broken it, not even the collapse of the Soviet Union in 1989-91. The U.S. government used covert rather than overt methods to overthrow the governments of Iran, Chile, Guatemala and other countries during the Cold War, and of course fought a major ground war in South Vietnam in 1965-73, which ended in defeat and did much to increase public distrust of the federal government. Arguably, this has never really been recovered since the days of Vietnam and Watergate. After the end of the Cold War, Bill Clinton and George Bush explicitly openly embraced neo-Wilsonianism in calling for the global expansion of liberal democracy, capitalism and free trade.
