1949 was a bad year for the United States. The Soviet Union had detonated their bomb, and then China Fell to the communists after a Civil War between Mao Zedong’s communists and Jiang Jeishi’s nationalists. Mao declared the People’s Republic of China but Jiang escaped, declaring Taiwan the real China instead. It was the latter that the United States recognized.
This led the United States to really feel like they were losing as they saw communism start to spread. This resulted in their creation of NSC 68, National Security Council Paper Number 68. It was secretive and called for taxes and military alliances like NATO to deal with the Soviet Union because there was no negotiating.