The problem isn't liberalism. The problem is that left used the dialectics of Hegel and Marx to twist liberalism into its opposite.
The American Founders were trained in classical logic (via Arnauld, etc). They applied classical logic to the question of liberty. I call this application of classical logic to questions of liberty "classical liberalism."
The founder's understanding of "liberty" could be summed up with the term "self-rule." The ancient regime held that man was an inherently savage creature and there needed to be a top heavy system to keep man in check. The Great Chain of Being had a whole class system with a monarchy, feudal lord and onerous social structure to keep people in check.
The founders realized that people are capable of ruling themselves.
Notice how this concept of self-rule implies self-discipline. It is not a libertine free-for-all.
Freedom is seen in opposition to kingdom. A free man rules himself as opposed to being ruled by the king's court.
Self-rule means people controlling themselves as opposed to a state controlling them.
Ruling over one-self requires that people have strong values including honesty, hard work, respect for others, charity, etc.. Let's call these values CL Values.
Classical logicians sought to avoid the reflexive paradox.
Classical liberals realized that if people had the freedom to deny the freedom of others, the free society would fall. The Christian Golden Rule is important to this view: A free man treats others as he would have others treat himself.
Sadly, the founders were incapable of ridding themselves the scourge of slavery that they inherited. The generations from 1800s to 1860s were consumed with this paradox. This corrupt period saw the rise of a number of extremely ugly dialectical ideologies and partisanship.
The Civil War is proof that the discourse of the early republic was poison.
The term "modern" refers to things happening post Kant (1724-1804). Things like Hegelianism, Mormonism, Marxism are part of the modern era. It was in this period that pretty much all of the ISMs appeared. The term "Capitalism" was actually popularized by the Marxists.
Modern philosophers captured the term "liberal" and turned it from meaning self-rule into meaning open-mindedness and libertine morals. Freedom is not seen in contrast to kingdom, but as a freedom from any form constraint, including moral constraint.
The other side of the great dialectic split that divides our nation is "conservatism."
Conservatism traces back to the revolution war, when the conservatives supported the British.
The partisan left/right split traces back to the French Revolution. The progressive left sought social change, and the reactionary right sought preservation of the social order of the ancient regime.
The post-modern conservativism that we know today arose under William Buckley. It adopted many of the positions of the early classical liberals, clings to the preservation of social order as its primary aim.
Buckley conservatives hold a moral code that is similar to the classical liberal moral code. Conservatives have the fault of assuming that this moral code is unique to themselves.
The primary difference between classical liberals and Buckley conservatives is that the former is based on classical logic, and the latter is part of the Hegelian/Marxist dialectical tradition.
Modern conservativism hold many of the positions of the US Founders (the classical liberals), but blames liberalism for all social ills ... effectively undermining itself.
Because modern conservatism has adopted this stance, it is incapable of restoring the system of self rule (classical liberalism) envisioned by the Founders.
The partisan left/right split of the French revolution coupled with the dialectical logic of Hegel, Joseph Smith, Marx, etc., has created a trap in which political control swings between two groups set on domination and not on restoring self rule.
Because conservatives are committed first and foremost to their partisanship and have adopted the dialectical mindset, they are incapable of the task of restoring freedom.