The United States' economy during the 1990's was uplifting for many citizens, investors, and the federal government.
The United States faced little inflation during the 90’s. The inflation rate was around 3.00% and is considered low compared to the 1970’s and 1910’s. 9.80% was the inflation rate during the 1910’s and 7.08% during the 1970’s. In 1990, a new house that was $123,000 cost $131,700 in 1999. During this decade, American dollars went farther when buying products or investing in companies. This low inflation may have helped with the 1990’s surplus. By Americans being able to use less money to buy a lot of things, they could spend more money that would be invested back into the economy. As the economy started to become worth more, it would lead into the government not having a deficit in the first 30 years.
During the years President Clinton was in office, the United States had its first surplus in 30 years, and Clinton was to thank for. The president cut federal spending on many federal programs such as welfare. Spending cuts ended up balancing the budget over the years and allowing the government to collect more tax money than they were spending. As this was happening, many Republicans wanted to cut taxes to stop the government from making a surplus. Clinton vetoed this because he planned on using the surplus to pay off the national debt the United States had accumulated over the years. His reason was cutting taxes meant that less money would be going into the surplus and the U.S. would probably go into a deficit again. Clinton’s cuts on government spending may not have been the only thing that caused the surplus. Growth in information technology grew 4.3% a year as productivity and manufacturing grew. Prices of the information technology systems dropped and more people invested in the companies. The drop in system prices lead to more people buying and more investing, which may have helped to enter America’s money back into the economy to help make the surplus.