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This thesis represents my attempt to broaden our understanding of the root causes and underlying nature of the Red Scare phenomenon. I cover both the Frist Red Scare of the early 1920s as well as the Second Red Scare of the late 1940s and early 1950s. After considerable research, I came to the conclusion that the traditional understanding of anti-communism in the US - as a reactionary movement largely motivated by the international hostility of the USSR - provides us with only half of the truth. In fact, the development of public hysteria over perceived Soviet infiltration had far more to do with domestic circumstances than it had to do with foreign threats. Chief among these motivating factors was the state of the US economy. During the 1920s, when many poorer Americans felt they had been left behind by the post-war boom, the federal government's attempts to develop public hostility towards socialism failed somewhat. But after the Fair Deal and the GI Bill ensured a new, broader prosperity for the larger American public, it became easy to galvanize citizens in response to a perceived threat to their happy way of life.