Great question. I think the word "liberal" has been abused for so long that one way to get large swaths of Americans to turn against you is to call you "a liberal." In 2009 some researches asked this question: why do Americans largely support liberal policies (medicare, a strong social security network, economic redistribution, etc) but refuse to call themselves "liberal"? The answer is what I detail in my book--it was a character assassination--they were attacked from the right, the left, civil rights activists, and lots more. This splintered the unity of the left and the center-left, meaning they are not as unified as those on the right. The right has been so successful because of their remarkable unity, despite the fact that much of what they propose polls unfavorably. Plus, there's just something wishy washy about the liberal tradition of talking things through and not having deep principles founded in religious faith or national identity.
Great question. A liberal is one who espouses liberalism, which of course provokes the next question: what is liberalism? It's a political philosophy deriving from the Latin word "Liber," which means "free." So liberalism is about protecting and expanding individual freedoms against anything that seeks to diminish them. The bad guys have changed over time, meaning the focus of liberalism has changed over time. When it was the yoke of the Catholic Church that was denying individual freedom (say starting in the 16th and 17th centuries), liberals attacked it, favoring religious tolerance and free expression. When it was kings and queens (in say the 18th and 19th centuries), liberal attacked them, favoring democracy and representative governments and the protection of individual rights. In the 20th and 21st centuries (since the rise of the Industrial Revolution) it has been big business and oligarchs who are denying widespread individual freedoms, so liberals have focused their attacks on redistributing the economy and regulating capitalism. As some posters have commented here, that brought it closer to socialism then ever before, and that's true. So liberals are those who evoke the spirit of protecting individual freedom, while being well aware that because those in power are so strong there will be some collective efforts required (taxation, social security floors, etc.). It's a spirit, though, not a set of policies--a fact that is both a great strength and a great weakness.
no