My wife and I recently had our first child. He is beautiful and perfectly healthy... and 3 months old. Our only frustration is... we cannot set him down. He will throw the biggest fit you can imagine. He will scream until he turns beet red and continue this for at least 20 minutes. That is as long as we have let him go before picking him up. After we have picked him up and he calms down, he is fine. We did hold him a lot when we first brought him home but did not imagine it would turn into this. He seems to have gone through a colicy phase but we think that is pretty much finished. Now he just seems to be thoroughly spoiled. What is the best way to undo what we seem to have done?

First time parents often make that mistake you are going to have to do everything you can to get him use to not being held all the time. Like WHEN he IS sitting quit try and leave him be like if it is bath time or feeding time and he is sitting quiet leave him alone until he seems like he is going to start getting cranky again. But you still want to pick him up BEFORE he does start crying because when you pick him up while he is crying then it reinforces crying gets him picked up. Spend a lot of time interacting with him when you are not holding him.
Like have a puppet or a toy that gets his attention and play with it with him so that he sees he does get attention even if he isn't being held.
It gets a little easier by the time they get between 6 months and 18 months and then after that it is more a question of reasoning with them and getting them to socialize with others.

You leave them sit down, and merely be tough the baby has you trained at this point and the baby is wiinning, you either learn to get tough or it will really only get worst

Sounds like you spoiled him. Not hard to do... Take it from a mother of 4 and a labor & delivery/nursery nurse.

Simply don't pick him up. If you know nothing is wrong, if he is not hungry, wet, dirty, rub his back, walk out of the room for 10 minutes then go back and rub him again.

Now, as a nurse, I must ask, how much is he eating? How often are you feeding him? What kind of formula are you feeding him?

They're all correct. Your 3 month old isn't intentionally doing this, he's simply responding to his environment the only way he knows how. At the least discomfort or fear, he cries.

It's that simple. This isn't a test of wills, it's a process of offering the child comfort from your presence alone, not by picking them up.

So, get some coffee, set aside a few HOURS for this, and go through it. You're not doing this to make YOUR life easier, you're doing it to make the BABY's life easier. This will reduce stress for the baby, so it is important.

Put the baby down and sit RIGHT NEXT to him, put your hands on him while you continue to talk and giggle and gurgle with him the way you would if you had him in your arms. Make a big deal of being RIGHT there, touching him.

Do this for awhile, keep your hands on the child, but slowly start to talk to him less and talk to each other.

Next, start to talk to the child a LOT again while you slowly take your hands away, then put them back, again and again, each time touching them for less length of time, until eventually you're being all giggly and gurgly but aren't touching at all.

The child will be uncomfortable at this point and may already be in full-crying mode. You'll have to let him cry while you stay nearby. He's not in danger, he's afraid. He's afraid of nothing in particular, just not being touched. He will HAVE to get used to using his eyes to find you and be comforted by that.

This will take many hours. The ultimate goal is to transfer his comfort mechanism to his eyes, and later to his ears. Eventually just hearing your voice, even from another room, will be comforting enough he can go back to entertaining himself.

Another crazy thought. Babies cry at physical discomfort, too.

What are you putting the baby down IN? If it's a carrier or baby chair, consider the seat/angle may be uncomfortable for the baby for some reason. Just like people try out many chairs to find the one they like, your baby may need that, too.

Experiment with several seats in the baby store, see if he responds well to one you don't have. If so, buy it.

I agree at this stage it is not a test of wills but his needs BUT if you don't break him of it/wean him then when he is older it will be a test of wills.
My grand baby is 4 months old and he has a variety of things he likes and he knows what he wants when he wants. Watch spongeBob and be held, watch SpongeBob and be in his walker, get walked around, be fed, diaper changed, etc... and he cries until he is happy.
My daughter will eventually have to get him to where he realizes he can't have what he wants when he wants but for now it is all he knows.
My sister always did whatever her third child wanted when he wanted and he grew up spoiled, demanding and bossy. Even at three years old she would cater to whateve he wanted when he wanted and never told him no or not now.
If you keep an eye on his 'maturity' level of what he is able to comprehend and what he is capable of then you will know when to do what. If you still aren't sure or having problems you can always ask here.

What have you done? You've done exactly what you should have! But it's all about balance as there is no size that fits all. Babies have different temperaments and will require different levels of attention.

You won't spoil a young baby, and you will teach them trust when you respond to their needs in a timely manner. They will often cry and fuss less down the road because they have learned to trust that their needs will be met and they will be comfortable with just knowing that mom or dad are near by. They will touch base with you now and then, sort of checking in, then turn back to what they were doing. There is a difference between wants and needs, however, and that is one thing parents need to be able to distinguish as their child gets older as it can become an issue later on.

The need to be held, and feel connected, is a very legitimate one for a young baby... they get so much more from touch than older children or adults do... although most people could probably use more of it!! However, this doesn't mean you need to drop everything with the first "waaaaa", rush in, and pick them up. Find a balance that works in your household.

Things change quickly in the first year and what is an issue at 3 months will often not be at 4 or 5 months. I wouldn't worry about a 3 month old needing to be more independent.