Science, Tech, Math › Social Sciences The American Economy in 2000 A Look Back at U.S. Finances at the End of the 20th Century Share Flipboard Email Print Getty Images/Chris Mellor/Lonely Planet Images Social Sciences Economics U.S. Economy Employment Supply & Demand Psychology Sociology Archaeology Environment Ergonomics Maritime By Mike Moffatt Professor of Business, Economics, and Public Policy Ph.D., Business Administration, Richard Ivey School of Business M.A., Economics, University of Rochester B.A., Economics and Political Science, University of Western Ontario Mike Moffatt, Ph.D., is an economist and professor. He teaches at the Richard Ivey School of Business and serves as a research fellow at the Lawrence National Centre for Policy and Management. our editorial process Mike Moffatt Updated February 11, 2019 After a tumultuous century embroiled in world wars and financial crises, the United States economy at the end of the 20th century was experiencing a period of economic calm wherein prices were stable, unemployment fell to its lowest level in 30 years, the stock market boomed and the government posted a budget surplus. Technological innovations and a rapidly globalizing market contributed to the economic boom near the end of the 90s, then again between 2009 and 2017, but many other factors — including presidential policy, foreign affairs, and domestic innovations and foreign supply and demand needs — affected the rise of the American economy as it entered the 21st century. Long-term challenges like poverty, especially for single mothers and their children, and environmental quality of life still faced the nation as it prepared to enter a new century of technological development and rapid globalization. A Calm Before the Turn of the Century With the presidency of Bill Clinton at the tail end of George Bush Sr.'s one-term presidency, the economy of the United States stabilized in the mid-1990s, creating a status in the economy as it prepared to enter a new millennium, finally recovered from two world wars, a 40-year Cold War, a Great Depression and several large recessions, and enormous budget deficits in government in the last half of the century. By 1998, the gross domestic product (GDP) of the U.S. had exceeded $8.5 trillion, achieving the longest uninterrupted period of expansion in American history. With just five percent of the world's population, the United States was accounting for 25% of the world's economic output, outproducing its closest rival Japan by nearly double the amount. Innovations in computing, telecommunications, and life sciences opened up new opportunities for Americans to work as well as new goods to consume while the collapse of communism in the Soviet Union and Eastern Europe and the strengthening of Western and Asian economies offered new business ventures for American capitalists. Uncertainty at the Edge of the Millennium While some may have rejoiced in the new expansion in technology and the economy of the United States, others were skeptical of the rapid changes and feared some of the long-term challenges American hadn't resolved yet would be forgotten in the blur of innovation. Although many Americans had achieved economic security by this point, with some even accumulating large sums of earnings, poverty was still a large issue facing the federal government and a substantial number of Americans lacked access to basic health coverage. Industrial jobs in the manufacturing field also took a hit at the end of the millennium, suffering setbacks as automation began to take over jobs and certain markets saw a decrease in demand for their goods. This resulted in a seemingly irreversible deficit in foreign trade. Ever the Market Economy As the United States passed into the early 2000s, one principle remained strong and true in terms of its economy: it was and would always be a market economy wherein the economy works best when decisions about "produce and what prices to charge for goods are made through the give-and-take of millions of independent buyers and sellers, not by government or by powerful private interests," according to the State Department website. In this free market economy, Americans feel that the true value of a good or service is reflected in its price, guiding the production end of the economy to only produce what is needed according to the supply-and-demand model, which leads to peak economic efficiency. As is the tradition in all things concerning American politics, it is essential to limit the government's involvement in determining the economic market of its country in order to prevent an undue concentration of power and promote the pluralist foundation of the United States.