Every story has a beginning, a middle, and an end. This chapter tells the middle part of our story – the turning point at which Truman's long struggle to contain postwar spending finally buckled and broke under the weight of a major military buildup. As we have seen, the war scare and the Republican tax cut of 1948 had stymied the president's initial efforts to downsize the military and redirect resources to peaceful purposes, the result being a budget deficit in fiscal year 1949. As the war scare dissipated, however, Truman tried again to rein in the defense budget by putting more emphasis on air–atomic power as a deterrent to Soviet expansion, by stressing mobilization potential rather than forces in being, and by using economic and military aid to help allies shoulder more of the burden of their own defense. In major respects, the administration's strategy foreshadowed the “New Look” of the Eisenhower era, which also envisioned a collective security system that the country could sustain over the long haul.

Truman's strategy had strong support from economizers who wanted to safeguard an “American way of life” they associated with a balanced budget. They still worried that national security needs would alter the American state, in effect redefining the country's postwar purpose to include defense and international obligations that were not easily reconciled with its free market values and democratic traditions.