In order to have capitalism, a free market is not all you must have, you must also have private ownership of property. Why? Because it gives people motive and incentive to work hard so they can prosper as individuals. After all, the United States, Democracy, is framed around individualism. The incredible thing about capitalism is that when you have people working hard to prosper and to make a better life for themselves, as well as their family, the market regulates itself. The market is successful all on its own without the governments intervention.
Until the 1930's, the United States had a very prosperous capitalist market. However, when the stock market crashed in 1929, people panicked, turned to the national government, and the down fall of capitalism for the United States quickly began to crumble.
When, Franklin D. Roosevelt, was elected president in 1932, the United States was shoulder deep in the Great Depression. The Great Depression was to economically overwhelming, that the state governments where clueless as to how to help their citizens. That meant that the national government was going to have to intervene and take on a more powerful role then it ever had before.
Almost immediately after taking office, Roosevelt started to develop a plan to get America out of this economic crisis. His plan was the New Deal. The New Deal established social security, developed government jobs, allotted money for the states in forms of grants, and expanded the national budget to the extreme.
The New Deal also expanded the size of the national government, gave the government more power over the states, and our once dual federalist system, quickly changed to a cooperative federalist system. Now, the state and national government's powers are not as distinctly separate as they were before the depression, but they are intertwined and overlapping.
Almost immediately after the New Deal was passed, the states started to receive funding and people where able to get government jobs and provide for their families. States set up welfare programs to assist people who where unemployed, disabled, and elderly. This New Deal seemed to save Americans and give them hope once more.
Not long after the New Deal was passed, the United States got involved in WWII. Almost over night the economy was back in business. New jobs where created due to efforts to help out with the war, young men where going into the military, and women really started coming out of the home and into the work force. Between the federal spending that was required to support the New Deal and the cost of going to war as well as supporting allies, the United States federal spending was out of control and the debt was racking up more quickly then ever before.
