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Following the Second World War, the Soviet Union and the United States emerged as new superpowers. The major point of divergence in World of Warsaw begins around 1960 with the United States suffering embarrassing losses against Communist forces in Vietnam, Angola, and Grenada. The increased spending on defenses by the Reagan administration sends the American deficit far too high, plunging the United States into a deep depression in 1987. In 1988, newly elected President Michael Dukakis vows to lead the United States out of the depression and calls off the Cold War. The underfunded American military is forced to withdraw from their bases in Western Europe, South Korea, the Philippines, and Japan. North Korea launches an attack on their southern neighbor and completely conquers it, absorbing it into their state and forming a single Korean communist state. The Arab League and Israel break their peace treaty and Israel is suddenly surrounded by enemy troops. However, the Soviet Union intervenes on behalf of Israel, saving the country but making it into a Soviet client state in the process. By the year 2000, the United States has split into several different states: the Republic of California consisting of California, Nevada, Oregon, Washington, Idaho, and Montana; Rushmore, consisting of North and South Dakota; the Mormon Republic, consisting of Utah, Wyoming, and Colorado; the Republic of Arizona, consisting of Arizona and New Mexico; the Midwest American Republic, consisting of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio, and Wisconsin; the Republic of Texas, which also controls Mexico as a puppet state; Georgia; the Second American Confederacy, consisting of Oklahoma, Louisiana, Arkansas, Mississippi, Alabama, Tennessee, Kentucky, Virginia, and West Virginia; the Republic of Carolina; and the rump United States of America, now consisting only of New York, Pennsylvania, New Jersey, Maine, Vermont, Massachusetts, Maryland, Delaware, Connecticut, Rhode Island, New Hampshire, Hawaii, and Puerto Rico. Following the dissolution of the United States, Cuba came to control Florida and Alaska was sold back to Russia, becoming the Alaskan Soviet Federative Socialist Republic.
Following is a list of significant states in World of Warsaw:
- Soviet Union: the dominant world power, a Communist state whose capitol is located in Moscow, Russia
- European Union: arguably the second-most-powerful state in the world, and one of the strongest opponents of the Soviet Union; during a panic which followed the withdrawal of American troops from Western Europe, several other states vouched for membership into the European Union, and Turkey, Norway, Switzerland, Iceland, and several Balkan states are admitted into the EU
- Arab League: a dominant power in the Middle East and northern Africa, consisting of Syria, Lebanon, Jordan, Iraq, Kuwait, Saudi Arabia, the United Arab Emirates, Yemen, Oman, Egypt, Sudan, Somalia, Libya, Algeria, Tunisia, Mauritania, and Morocco (which has also absorbed Western Sahara)
- Brazil: an emerging superpower that is coming to dominate South America as an economic power
- Republic of California: a Pacific coastal state in the former United States, mostly liberal in its political alignment but otherwise similar to the former United States, and consisting of California, Nevada, Oregon, Washington, Idaho, and Montana
- Rushmore: an entirely liberal country in the former United States, operating with a single-party but non-totalitarian system of government
- Mormon Republic: a land-locked, heavily religious country consisting of Utah, Wyoming, and Colorado in the former United States, the official religion of this country is Mormonism, and all other religions and sects of Christianity are discouraged
- Republic of Arizona: a land-locked, strict totalitarian state consisting of Arizona and New Mexico that emphasizes white supremacy and vehemently opposes immigration, especially from Mexico to the south
- Midwest American Republic: one of the larger American states, consisting of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio, and Wisconsin
- Republic of Texas: a single-party conservative state which holds control over Mexico as a puppet state
- Georgia: the first state to secede from the United States late in 1989, now a two-party state that heavily leans towards the conservative side
- Second American Confederacy: sometimes called the successor state of the Confederate States of America, and consisting of most of the states that comprised the former CSA: Oklahoma, Louisiana, Arkansas, Mississippi, Alabama, Tennessee, Kentucky, Virginia, and West Virginia
- Republic of Carolina: an Atlantic coastal state which is most similar to the former United States, evenly half Democratic and half Republican, consisting of North and South Carolina
- United States of America: the small remnant of the former USA now consists only of New York, Pennsylvania, New Jersey, Maine, Vermont, Massachusetts, Maryland, Delaware, Connecticut, Rhode Island, New Hampshire, and Hawaii. This state came to be friendly towards the Soviet Union, practically as a puppet state, but has not become an ally of the Soviet Union due to pressure from the other American states and from the European Union; during the panic of the USA's dissolution, Puerto Rico requested statehood as protection from Cuba