The history of the United States from 1991 to 2016 began following the dissolution of the Soviet Union. The dissolution signaled the end of the Cold War and left the U.S. unchallenged as the world's sole 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 won a return to the White House with the election of Bill Clinton in 1992. In the 1994 midterm election, the Republicans won 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 Clinton–Lewinsky scandal led to the 1998 impeachment of Bill 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 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 to depose the Taliban and eliminate Al-Qaeda. In 2003, the U.S. invaded Iraq, deposing Saddam Hussein and setting up the Republic of Iraq resulting 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.
The collapse of the housing bubble in 2007 led to the Great Recession. The resulting economic downturn and general discontent led Barack Obama to win the presidential election in 2008, becoming the country's first African-American president. Obama's domestic agenda notably included economic stimulus packages and the Affordable Care Act. The year 2011 saw the formal end to the Iraq War, the killing of Al-Qaeda leader Osama bin Laden, and the outbreak of the Syrian Civil War. The war on terror continued with an increase in the use of drone warfare and a shift in attention toward the Islamic State in the 2010s. In 2016, China surpassed the United States to become the world's largest economy when measured by purchasing power parity (PPP).
Globalization and the new economy
During Bill Clinton's presidency American political discourse focused mostly on domestic issues. 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%.
Following 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. China was emerging as the U.S.'s foremost trading competitor in more and more areas, with China's exports growing exceedingly during the 1990s and well into the 2000s. 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, mainly 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—with almost half entering illegally.
The 1990s saw the US becoming more involved in free trade with the NAFTA agreement involving the US, Canada and Mexico being signed in 1992 before coming into effect in 1994 along with joining the World Trade Organization in 1995. During this period, inflation remained low despite recessions happening making it different from previous times in US history when inflation would increase when the economy grew. Deflation was only reported in one year which was 2009 with the inflation rate being −0.4%.
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, 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.
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%.
Great Recession
The Great Recession began in December 2007 and was both a financial crisis and a deep recession. While the recession officially lasted from December 2007 to June 2009, it took a number of years for the economy to recover to pre-crisis levels of employment and output. This slow recovery was due in part to households and financial institutions paying off debts accumulated in the years preceding the crisis along with restrained government spending following initial stimulus efforts. It followed the bursting of the housing bubble, the housing market correction and subprime mortgage crisis.
According to the Department of Labor, roughly 8.7 million jobs (about 7%) were shed from February 2008 to February 2010, and real GDP contracted by 4.2% between Q4 2007 and Q2 2009, making the Great Recession the worst economic downturn since the Great Depression. The GDP bottom, or trough, was reached in the second quarter of 2009 (marking the technical end of the recession that is defined by "a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales"). Real (inflation-adjusted) GDP did not regain its pre-crisis (Q4 2007) peak level until Q3 2011. Unemployment rose from 4.7% in November 2007 to peak at 10% in October 2009, before returning steadily to 4.7% in May 2016. The total number of jobs did not return to November 2007 levels until May 2014. Some areas, such as jobs in public health, have not recovered as of 2023.
Households and non-profit organizations added approximately $8 trillion in debt during the 2000–2008 period (roughly doubling it and fueling the housing bubble), then reduced their debt level from the peak in Q3 2008 until Q3 2012, the only period this debt declined since at least the 1950s. However, the debt held by the public rose from 35% GDP in 2007 to 77% GDP by 2016, as the government spent more while the private sector (e.g., households and businesses, particularly the banking sector) reduced the debt burdens accumulated during the pre-recession decade. President Barack Obama declared the bailout measures started under the Bush administration and continued during his administration as completed and mostly profitable as of December 2014.
Rise of the Chinese economy
In 2016 China surpassed the United States as the world's largest economy when measured by purchasing power parity (PPP).
Conflicts
Persian Gulf War
The considerable dependence of the industrialized world on oil starting in the 1930s, with much of the proved oil reserves situated in Middle Eastern countries, became evident to the U.S., first in the aftermath of the 1973 world oil shock and later in the second energy crisis of 1979. Although in real terms oil prices fell back to pre-1973 levels through the 1980s, resulting in a windfall for the oil-consuming nations (especially North America, Western Europe, and Japan), the vast reserves of the leading Middle East producers guaranteed the region its strategic importance. By the early 1990s the politics of oil still proved as hazardous as it did in the early 1970s.
Conflict in the Middle East triggered yet another international crisis on August 2, 1990, when Iraq invaded and attempted to annex neighboring Kuwait. U.S. officials feared that Hussein was then on the verge of armed conflict with oil-rich Saudi Arabia, a close ally of Washington's since the 1940s. The United Nations condemned the invasion as an act of aggression; President Bush compared Hussein to Adolf Hitler and declared that if the United States and international community did not act, aggression would be encouraged elsewhere in the world. The Security Council gave Iraq a deadline to leave Kuwait, but Saddam Hussein ignored it, and the Security Council authorized a military response. The war began in January 1991, with U.S. troops forming the majority of the coalition which participated in Operation Desert Storm. By the time Iraqi troops withdrew from Kuwait in late February, Iraq had lost approximately 20,000 troops, with some sources citing as many as 100,000 casualties on the Iraqi side.
Conflicts in Somalia, Bosnia, Kosovo, and the Middle East
In December 1992, President Bush sent troops to join the UN Operation Restore Hope, a multi-national effort to restore order and provide humanitarian aid in Somalia, which was torn by civil war, famine, and warlords. By the summer of 1993, the situation had deteriorated. After 24 Pakistani soldiers were killed in June 1993, the UN passed a resolution calling for the arrest and trial of those responsible for the attack. Under the leadership of newly elected President Bill Clinton, U.S. forces launched a concentrated attack on Aidid's stronghold in Mogadishu in Operation Gothic Serpent. In October 1993, 18 soldiers were killed and 84 were wounded in the Battle of Mogadishu. Following the attack, Clinton ordered U.S. forces withdrawn from the region, with the last being withdrawn by 1995, and fired his Secretary of Defense Les Aspin who had not sent adequate forces.
In the mid-1990s, the United States was involved in the Bosnian War through the North Atlantic Treaty Organization (NATO), most notably the 1995 bombing campaign, which finally led to the Dayton Peace Agreement which ended the war by the end of 1995. In early 1998, the region became volatile again as war erupted between the army of the Federal Republic of Yugoslavia and the Kosovo Liberation Army, a guerrilla group. A 1999 NATO bombing campaign struck Yugoslavia, resulting in the deaths of hundreds of Yugoslavian soldiers and civilians. As a result, Yugoslavia withdrew from Kosovo and Kosovo became an independent state.
President Clinton also ordered cruise missile strikes on Iraq in 1996 and bombing attacks on Iraq in 1998, which were launched in response to Saddam Hussein's violation of several UN resolutions, including repression of ethnic minorities (Kurds) and removing UN weapons inspectors. The 1998 campaign, in particular, was meant to de-stabilize the Iraqi government and degrade the power of Hussein. Clinton also signed the Iraq Liberation Act to appropriate funds to Iraqi opposition groups in the hopes of overthrowing Hussein's regime and establishing democracy.
Throughout the 1990s, the United States also played an active role in peace efforts in the Israeli–Palestinian conflict. President Clinton, Israeli Prime Minister Yitzhak Rabin, and Palestinian Prime Minister Yasser Arafat met and signed the Oslo Accords in 1993, which called for the gradual ceding of control of Palestinian areas to the Palestinians in exchange for peace. However, Rabin was assassinated in 1995 and by 2000, the Camp David Summit failed to yield a new agreement.
Early Islamist terrorist attacks
The 1990s also featured a series of increasingly violent attacks associated with Islamist terrorists, including al-Qaeda, a radical Islamist militant organization led by Osama bin Laden. On February 26, 1993, a truck bomb was detonated at the World Trade Center in New York City, killing six civilians and injuring 919 others, 88 firefighters, and 35 police officers. The attack was intended to destroy the foundation of the North Tower, knocking the tower into the South Tower, which would destroy both buildings and kill thousands of people. While this did not happen, the bomb caused considerable damage to the lower levels of the North Tower. In 1994, four men were convicted of carrying out the bombing and in 1997, two men were convicted for their roles, including the truck driver and the mastermind, Ramzi Yousef.
On June 25, 1996, members of Hezbollah Al-Hejaz bombed the Khobar Towers, a complex in Khobar, Saudi Arabia, where members of the United States Air Force were being housed, killing 19 American airmen and injuring over 300 other people.