I would have to disagree that American liberalism broke down and could not solve the problems of the country effectively. "Before the New Deal gave the term liberalism its modern American meaning, it was a little-used word that referred to a belief in laissez-faire economics and limited government." (http://college.hmco.com/history/readerscomp/rcah/html/ah_053200_liberalism.htm) The New Deal, The Fair Deal, The New Frontier, and The Great Society all brought about …
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…it put ideas into future generations and in my opinion it did not break down. "Its concentrated power, guided by academic expertise, was legitimated by a democratic majoritarianism that cut against the grain of American individualism." (http://college.hmco.com/history/readerscomp/rcah/html/ah_053200_liberalism.htm) Liberalism may not have accomplished the goals it was set out to do, but in part provided solutions to many problems; only these solutions were not followed thru.