It's complex. On the one hand, the House Committee report that started McCarthy's downfall made it clear that McCarthy had grossly exaggerated the threat of Communism within the USA and accused many if not most people over the years without any good reason. On the other hand, anti-Communism had been a fixture of US society from 1917 on, even though Communism never had taken root in the US. But it had long been a custom in the US to label many liberal or social projects (such as for instance the law abolishing child labor) 'Communist', and even McCarthy's downfall did little to diminish the general grass-roots feeling against Communism and often any form of 'socialism' or liberalism.

Another factor was that regardless of the end of McCarthy's 'reign of terror' so to speak, the Cold War still was an everyday reality with its ever-accelerating nuclear arms race.

So although many Americans felt a little ashamed to have seen Communists under each and every of their beds, the Red Scrare remained until after the fall of the Soviet Union around 1990. The funny thing in hindsight was that the Russians - who had lost several times more lives than all the other Allies taken together in WW 2 and who had seen direct American involvement with the forces fighting the Russian government it its civil war - were as scared if not even more scared of American agression and domination as the Americans were of theirs.

The "outside" factors causing the 'red scare' were: a) the development of the atomic bomb by the Russians, b) the establishment of Communist regimes in several East European countries by the USSR, c) the take-over of mainland China by the Communists and d) the attack of Communist North Korea on South Korea, leading to the Korean war.

The "inside" factors within the USA for it were a number of espionage trials against people suspected of working for the USSR. And generally speaking, conservative politicians and their financial backers in the industrial world had already a long tradition of seeing pro-labor laws (like the abolition of child labor and maximum working hours) and even the New Deal as so many communist-inspired plots against the Free Market and the American Way.

The factors leading up to McCarthyism were: a) President Truman's Loyalty Review program that he instituted in 1947 under Republican pressure to check on public servants and which program was expanded under President Eisenhower who limited the possibilities for defense and appeal against accusations; b) the institution of the House Committee on Un-American Activities (which in turn led to a great number of State and even private 'review' Boards on the subject. And finally there was the FBI under the violently conservative and anti-Communist Edgar J. Hoover who saw to it that people could be accused of being Communist sympathisers without the victim being told who was accusing him and of what , exactly.