1979 yuri Andropov becomes soviet leader after the death of Brezhnev from a stroke. Meanwhile the situation in Iran is getting out of control after he fall of the shah - Islamic faction is fighting the Tudeh (communists) on the streets of tehran.
Islamic faction seizes the soviet embassy and a bunch if soviet diplomats get killed. KGB warns Andropov that there is a danger of islamic radicalism spreading into Muslim regions of the user, from Iran and Afghanistan. Andropov reluctantly opts for a military solution.
December 25, the ussr invades Iran and Afghanistan.
The indo-Pakistan situation deteriorates as well. With limited air strikes and troop build ups in Kashmir.
President carter announces the carter doctrine: any soviet intervention in Saudi Arabia, Kuwait or the gulf emirates will result in a us military response. The gulf states however decline to offer bases to the us.
Iraq, which has been conspicuously excluded from the us guarantee, gradually aligns itself more closely with the ussr. Vice president saddam Hussein takes power in early 1980, purges the Ba'ath party, and announces a military alliance with the soviet bloc.
There is Islamic resistance in Iran and Afghanistan but it is weak. In Iran, it is weak because the Sunni gulf states refuse to supply arms to the Shia resistance. In afghanistan it is weak, because the only possible conduit for arms, Pakistan, is surrounded on all sides, and refuses to take he risk of allowing arms to pass hrough it's territory.
Gas prices hit $200 per gallon, causing major economic problems in the west.
Reagan is elected as new us president, promising to stand up to the soviets.
Many NATO countries begin to drift towards neutralism or finlandization in order to get access to cheap soviet gas supplies.
Reagan begins a massive military build up, as well as cutting taxes, the latter in an attempt to spur economic growth. Gas prices are so high, and the world economy so bad, that us economy continues to decline, and the deficit reaches unprecedented levels.
The democratic party in the us moves to the left, and selects Jesse jackson as their presidential candidate in 84. Reagan wins again.
By 1987 the deficit is out of control, and the us is bogged down fighting leftwing guerillas in an expensive war in central America. Reagan ends up being impeached after a financial scandal involving smuggling arms to rightwing guerillas (which congress has not authorised) in Nicaragua. Bush becomes president.
By 1988 the democratic party has broken apart in several factions and is no longer a serious threat to the republicans. The main threat to bush are right-wingers in the republican party (the so called tea party), who want to cut deficit spending. Nevertheless bush is reelected.
By 92, inflation has reached 400%, and the deficit is unsustainable. The tea party faction, led by newt Gingrich takes over the republican party.
Within 100 days of being elected, the Gingrich administration passes bills repudiating all federal government debt, and abolishing all general federal taxes (taxes may in future only be spent on the purpose for which they are raised, for example patent application fees may only be spent on the patent office). These laws are soon bolstered by constitutional amendments making them permanent.
This causes several effects:
1. A couple of years of complete chaos.
2. Eventually massive economic growth under this extreme free Market system - however as many people are left out of growth, there is great social disunity.
3. Federal government becomes much weaker.
4. Federal government starts to charge higher fees for services (and some states do the same in imitation), which restricts access to government services to those who can pay. For example, if you don't pay for the policing in your area, you don't get any. If you don't pay the full court costs, you can't conduct a civil or criminal case against someone who wronged you.
5. States become much stronger.
Now we have regionalism, no powerful central government, and social disunity... I think civil war is achievable by 2000... I may add more later.