The United States faced several serious challenges as it entered the 1990s. On the one hand, the continued collapse of the Soviet Union meant that the United States was now the lone superpower in the world. America soon found out what that meant when Iraq invaded Kuwait. President George Bush (1924–) sent in American troops to restore Kuwait and to challenge the armies of Iraqi leader Saddam Hussein (1937–). Bush's victory in the Gulf War (1991) brought him high approval ratings at home, but not high enough to override the mounting economic problems the country was facing.

The American economy, which had seemed so healthy for much of the 1980s, had come under increasing strain late in the decade. This strain was due in part to the huge budget deficits created by the Reagan administration (1981–89). As the economy slipped into recession, President Bush was forced to take...