How did it impact the United States? What changed because of this economically, socially, etc? Why did this mainly affect the west/southwest areas of America?
So I think there may be some misconceptions here.
First is that it is near impossible to pick a date as the started of the MI Complex. Mostly because for as long as there have been governments there have been defense contractors. The Romans even had issues with them. From the Revolution on down to modern times there have been issues of cost overruns, quality control, and fraud.
And as for location I would say without a shadow of a doubt that the area most impacted by the defense industry is the DC metro area. Besides the government offices you have dozens of companies like Booz Allen, Northrop Grumman, Lockheed Martin, and others who have long had their headquarters in northern Virginia.
You also then have the major shipbuilding center of Norfolk, Bath Maine, and the Gulf coast.