Question

how did the fear of communism affect the lives of the american people

Answer 1

they became afraid to speak and were easy to manipulate

Answer 2

Just adding to haileyshay's answer because it's on the right track.

As an example, the so-called "Red Scare" of in the forties and fifties made people worried over whether there were Communist sympathizers everywhere.

Even the government began to hold hearings on who and who wasn't a Communist focusing on Hollywood because of the influence of that the entertainment industry had. A number of actors, writers, etc. were blacklisted and couldn't find work because they might have been suspected as being Communist even though there was no proof.

It was like a modern day witch hunt that ruined the lives of countless people, often based on hearsay and sensationlism. People could be forced to denounce friends if they were afraid that they might be considered a Communist sympathizer instead.