History of the United States (1991–2008)

The history of the United States from 1991 to 2008 began after the fall of the Soviet Union which signaled the end of the Cold War and left the U.S. unchallenged as the world's dominant superpower. The U.S. took a leading role in military involvement in the Middle East. The U.S. expelled an Iraqi invasion force from Kuwait, a Middle Eastern ally of the U.S., in the Persian Gulf War. On the domestic front, the Democrats returned to the White House with the election of Bill Clinton in 1992. In the 1994 midterm election, the Republicans gained control of Congress for the first time in 40 years. Strife between Clinton and the Republicans in Congress initially resulted in a federal government shutdown following a budget crisis, but later they worked together to pass welfare reform, the Children's Health Insurance Program, and a balanced budget. Charges from the Lewinsky scandal led to the 1998 impeachment of Clinton by the House of Representatives but he was later acquitted by the Senate. The U.S. economy boomed in the enthusiasm for high-technology industries in the 1990s until the NASDAQ crashed as the dot-com bubble burst and the early 2000s recession marked the end of the sustained economic growth.

In 2000, Republican George W. Bush was elected president in one of the closest and most controversial elections in U.S. history. Early in his term, his administration approved education reform and a large across-the-board tax cut aimed at stimulating the economy. Following the September 11 attacks in 2001, the U.S. embarked on the Global War on Terrorism, starting with the 2001 war in Afghanistan. In 2003, the U.S. invaded Iraq, which deposed the controversial regime of Saddam Hussein but also resulted in a prolonged conflict that would continue over the course of the decade. The Homeland Security Department was formed and the controversial Patriot Act was passed to bolster domestic efforts against terrorism. In 2006, criticism over the handling of the disastrous Hurricane Katrina (which struck the Gulf Coast region in 2005), political scandals, and the growing unpopularity of the Iraq War helped the Democrats gain control of Congress. Saddam Hussein was later tried, charged for war crimes and crimes against humanity, and executed by hanging. In 2007, President Bush ordered a troop surge in Iraq, which ultimately led to reduced casualties.

Globalization and the new economy

Clinton's terms in office will be remembered for the nation's domestic focus during this period. While the early 1990s saw the US economy mired in recession, a recovery began starting in 1994 and began accelerating thanks to a boom created by technology. The Internet and related technologies made their first broad penetrations into the economy, prompting a Wall Street technology-driven bubble, which Federal Reserve chairman Alan Greenspan described in 1996 as " irrational exuberance". By 1998, the economy was booming and unemployment below 5%. [1]

After the dissolution of the Soviet Union in 1991, the United States was the world's dominant military power and Japan, sometimes seen as the largest economic rival to the U.S., was caught in a period of stagnation.[ citation needed] China was emerging as the U.S.'s foremost trading competitor in more and more areas.[ citation needed] Localized conflicts such as those in Haiti and the Balkans prompted President Bill Clinton to send in U.S. troops as peacekeepers, reviving the Cold-War-era controversy about whether policing the rest of the world was a proper U.S. role. Islamic radicals overseas loudly threatened assaults against the U.S. for its ongoing military presence in the Middle East, and even staged the first World Trade Center attack, a truck bombing in New York's twin towers, in 1993, as well as a number of deadly attacks on U.S. interests abroad.

Immigration, most of it from Latin America and Asia, swelled during the 1990s, laying the groundwork for great changes in the demographic makeup of the U.S. population in coming decades, such as Hispanics replacing African-Americans as the largest minority. Despite tougher border scrutiny after the September 11 attacks, nearly 8 million immigrants came to the United States from 2000 to 2005—more than in any other five-year period in the nation's history. [2] Almost half entered illegally. [3]

Dot-com bubble

Early 2000 to 2001 saw the dramatic bursting of the dot-com bubble. Excitement over the prospects of Internet stocks had led to huge increases in the major indexes. However, dozens of start-up Internet companies failed as many of the lofty promises heralded by the new world of the Web failed to materialize. On March 10, 2000, the NASDAQ peaked at 5,048.62, [4] more than double its value just a year before. The downturn began on March 13, 2000, triggering a chain reaction of selling that fed on itself as investors, funds, and institutions liquidated positions. In just six days, the NASDAQ had lost nearly nine percent, falling to 4,580 on March 15. By 2001, the bubble was deflating at full speed. A majority of the dot-coms ceased trading after burning through their venture capital, many having never made a profit. [5]

In 2002, the GDP growth rate rose to 2.8%. A major short-term problem in the first half of 2002 was a sharp decline in the stock market, fueled in part by the exposure of dubious accounting practices in some major corporations. Another was unemployment, which experienced the longest period of monthly increase since the Great Depression. The United States began to recover from the post-9/11 recession in 2003, but the robustness of the market (7% GDP growth), combined with the unemployment rate (above 6%), led some economists and politicians to refer to the situation as a " jobless recovery". Despite this, economic growth continued apace through early 2008 and unemployment dropped below 5%. [6]