Plagued by the Iran hostage crisis, runaway inflation, and mounting domestic opposition, Carter lost the 1980 United States presidential election to Republican Reagan.

These actions accelerated the end of the Cold War, which occurred in 1989–1991, as typified by the collapse of communism both in Eastern Europe, and in the Soviet Union, and in numerous Third World clients.

The Iran–Contra affair was the most prominent scandal during this time, wherein the Reagan Administration sold weapons to Iran, and used the money for CIA aid to pro-American guerrilla Contras in left-leaning Nicaragua.

A widely discussed demographic phenomenon of the 1970s was the rise of the "Sun Belt", a region encapsulating the Southwest, Southeast, and especially Florida and California (surpassing New York as the nation's most populous state in 1964).

The boom mentality in this growing region conflicted sharply with the concerns of the Rust Belt, populated mainly by those either unable or unwilling to move elsewhere, particularly minority groups and senior citizens.

Electoral trends in the regions reflect this divergence—the Northeast and Midwest have been increasingly voting for Democratic candidates in federal, state and local elections while the South and West are now the solid base for the Republican Party.

They regarded concessions to relatively weak enemies of the United States as appeasing "evil", attacked détente, opposed most-favored nation trade status for the Soviet Union, and supported unilateral American intervention in the Third World as a means of boosting U.S. leverage over international affairs.

[11] In the late 1970s, the U.S. was gripped by the worst economy since the 1930s with American automobile and steel industries confronting serious challenges, the ongoing Iran hostage crisis, and the Soviet Union expanding globally in Africa, Asia, Latin America, and elsewhere.

President Jimmy Carter's prospects for reelection in the U.S. presidential election of 1980 were strengthened when he easily beat back a primary challenge by liberal icon Senator Edward Kennedy of Massachusetts.

Against the backdrop of economic stagflation and perceived American weakness against the USSR abroad, Ronald Reagan, former governor of California, won the Republican nomination in 1980 by winning most of the primaries.

After failing to reach an unprecedented deal with Ford, who wanted to be a sort of co-president, Reagan picked his chief primary rival, George H. W. Bush, as the vice-presidential nominee.

[12] Reagan promised to rebuild the U.S. military, which had sharply declined in strength and morale after the Vietnam War, and restore American power and prestige on the international front.

The major issues of the campaign were the economic stagflation, threats to national security, the Iranian hostage crisis, and the general malaise that seemed to indicate America's great days were over.

Reagan's 1981 economic legislation, however, was a mixture of rival programs to satisfy all his conservative constituencies (monetarists, cold warriors, middle-class swing voters, and the affluent).

His Budget Director David Stockman, an ardent fiscal conservative, wrote, "I knew the Reagan Revolution was impossible—it was a metaphor with no anchor in political and economic reality."

The administration sought to overcome this by backing the relatively cheap strategy of specially trained counterinsurgencies or "low-intensity conflicts" rather than large-scale campaigns like Korea and Vietnam, which were enormously costly both in money and human life.

On October 19, the small island nation of Grenada had undergone a coup d'état by Bernard Coard, a staunch Marxist–Leninist seeking to strengthen the country's existing ties with Cuba, the Soviet Union, and other Communist states.

The Reagan administration also supplied funds and weapons to heavily militarily-influenced governments in El Salvador beginning in 1980 and Honduras, and to a lesser extent in Guatemala, which was ruled by right-wing military autocrat General Efraín Ríos Montt from 1982–83.

Central America was the Reagan administration's primary concern, especially El Salvador and Nicaragua, where the Sandinista revolution brought down U.S.-backed Anastasio Somoza Debayle's rule in 1979.

The two countries had been historically dominated by multinational corporations and wealthy landowning oligarchs while most of their population remained in poverty; as a result, predominantly Marxist revolutionary leaders had won increasing support from the peasantry in both nations.

In 1985, Reagan authorized the sale of arms in Iran in an unsuccessful effort to free U.S. hostages in Lebanon; he later professed ignorance that subordinates were illegally diverting the proceeds to the Contras, a matter for which Marine Lieutenant Colonel Oliver North, an aide to National Security Advisor John M. Poindexter, took much of the blame.

In Afghanistan, Reagan massively stepped up military and humanitarian aid for mujahideen fighters against the Soviet proxy government there, providing them with Stinger anti-aircraft missiles.

While it was Jimmy Carter who had officially ended the policy of détente following Soviet intervention in Afghanistan, East-West tensions in the early 1980s reached levels not seen since the Cuban Missile Crisis.

Focused on perestroika, Gorbachev struggled to boost production of consumer goods, which would be impossible given the twin burdens of the Cold War arms race on one hand, and the provision of large sums of foreign and military aid, which the socialist allies had grown to expect, on the other.

The result in the Soviet Union was a dual approach of concessions to the United States and economic restructuring (perestroika) and democratization (glasnost) domestically, which eventually made it impossible for Gorbachev to reassert central control.

Reagan's vice-president George H. W. Bush easily won the 1988 Republican nomination and defeated Democratic Massachusetts governor Michael Dukakis by an electoral landslide in the 1988 election.

While there was a certain reluctance among the U.S. public, and even within the government, to get involved in localized conflicts in which there was little or no direct U.S. interest at stake, these crises served as a basis for the renewal of Western alliances while communism was becoming less relevant.

The U.S. often made moves to economically sanction countries which were said to be sponsoring terrorism, engaging in the proliferation of weapons of mass destruction or committing serious human rights abuses.

There was sometimes a consensus for these moves, such as with the U.S. and European embargoes imposed on arms sales to China after its violent suppression of the Tiananmen Square protests of 1989, as well as for the UN Security Council's imposition of sanctions on Iraq after its invasion of Kuwait.

Support for other unilateral sanctions however, such as the ones levied on Iran and Cuba, were limited, leading Congress to impose measures intended to punish foreign companies which violated the terms of the U.S.'s own laws.