Is this something you learned listening to rodeo clowns like Glenn Beck, or do you just 'feel' that is what happened?
Because the OPPOSITE is what really happened...
After the First World War right-wing German and Italian critics abused the governments of Weimar Germany and pre-Mussolini Italy for their commitment to social welfare, which their critics linked to an unwillingness to use force in international relations. To use Robert Kagan’s expression, the Weimar Republic could only do the dishes, not prepare the feast.
German and Italian critics of liberalism—writers such as Ernst Jünger and Giovanni Gentile—longed for the military spirit that allegedly typified the “front-fighter” generation that had lived through the horrors of trench warfare during World War I. The experience of war, they said, could redeem the anti-national Weimar Republic and the spineless decadence of Italian liberalism by reintroducing them to the necessity of using force—which would mean a much more ready resort to military power and a reorientation of government to promote its use. Both men and nations could thereby reestablish their virility.
Extreme right-wing theoreticians—for example, German jurist and political philosopher Carl Schmitt—believed that the European states in general had to choose between defending the interests of their national communities—at the end of the day by force—and sustaining a debilitating commitment to popular welfare, which more and more absorbed the energies of a weak-kneed liberalism that precariously clung to power in many European states. Schmitt believed that the state existed exclusively to oppose the enemies of the national community and ensure domestic order. Politics, he famously said, is founded on the friend-enemy polarity. Liberals had embarked on a fruitless crusade to escape inevitable political conflict within their societies by expanding the welfare function of the modern state to appease the demands of the masses, and thereby weakening its “executive function.”
The proximate causes of this revulsion against liberalism in Italy, Germany, and elsewhere are not far to seek. And the underlying anti-liberal logic was more cultural than political-economic. After defeat in World War I neither Germany nor Italy was able to advance its interests effectively in Europe. The Italians were widely regarded as pathetic soldiers. “The Italians,” Bismarck said, “have such large appetites and such poor teeth.” Giovanni Gentile, subsequently a Fascist minister for Mussolini, lamented the dolce far niente (“sweet do nothing”

that he found characterized the Italians as a nation. As for the Germans, they had of course lost the war, but they were encouraged to believe that their armies and fighting men had not been defeated on the battlefield but had been betrayed by an unpatriotic cabal of Jews, Francophiles, liberals, and socialists.
So for these men and like-minded others, there was a necessary connection between reviving militarism and imperialism and curtailing the state’s commitment to popular welfare. Only a new political elite—battle-hardened, ruthless, and devoted to authoritarian government—could achieve the reforms needed to restore these states to the ranks of the European powerful. The new governments would not be parliamentary: talk shops never get anything done. In Italy the Fascist elite developed an imperial ideology focusing on Rome; in Germany, too, there was an imperial element—the “Thousand Year Empire”—although we correctly understand the racism of the National Socialists to have been their most memorable contribution to the horrors of the 20th century.
The Hard Road to Fascism