The country voted for a return to “normalcy” when it elected Warren G. Harding President in 1920, but the ensuing period was a time of rapid change, and the old normalcy was not to be regained. The Republican governments of the decade, although basically committed to laissez faire, actively encouraged corporate mergers and subsidized aviation and the merchant marine. Harding's administration, marred by the Teapot Dome scandal, gave way on his death to the presidency of Calvin Coolidge, and the nation embarked on a spectacular industrial and financial boom. In the 1920s the nation became increasingly urban, and everyday life was transformed as the “consumer revolution” brought the spreading use of automobiles, telephones, radios, and other appliances. The pace of living quickened, and mores became less restrained, while fortunes were rapidly accumulated on the skyrocketing stock market, in real estate speculation, and elsewhere. To some it seemed a golden age. But agriculture was not prosperous, and industry and finance became dangerously overextended.
In 1929 there began the Great Depression, which reached worldwide proportions. In 1931, President Herbert Hoover proposed a moratorium on foreign debts, but this and other measures failed to prevent economic collapse. In the 1932 election Hoover was overwhelmingly defeated by the Democrat Franklin D. Roosevelt. The new President immediately instituted his New Deal with vigorous measures. To meet the critical financial emergency he instituted a “bank holiday.” Congress, called into special session, enacted a succession of laws, some of them to meet the economic crisis with relief measures, others to put into operation long-range social and economic reforms. Some of the most important agencies created were the National Recovery Administration, the Agricultural Adjustment Administration, the Public Works Administration, the Civilian Conservation Corps, and the Tennessee Valley Authority. This program was further broadened in later sessions with other agencies, notably the Securities and Exchange Commission and the Works Progress Administration (later the Work Projects Administration).
Laws also created a social security program. The program was dynamic and, in many areas, unprecedented. It created a vast machinery by which the state could promote economic recovery and social welfare. Opponents of these measures argued that they violated individual rights, besides being extravagant and wasteful. Adverse decisions on several of the measures by the U.S. Supreme Court tended to slow the pace of reform and caused Roosevelt to attempt unsuccessfully to revise the court. Although interest centered chiefly on domestic affairs during the 1930s, Roosevelt continued and expanded the policy of friendship toward the Latin American nations which Herbert Hoover had initiated; this full-blown “good-neighbor” policy proved generally fruitful for the United States . Roosevelt was reelected by an overwhelming majority in 1936 and won easily in 1940 even though he was breaking the no-third-term tradition.

The ominous situation abroad was chiefly responsible for Roosevelt's continuance at the national helm. By the late 1930s the Axis nations (Germany and Italy) in Europe as well as Japan in East Asia had already disrupted world peace. As wars began in China, Ethiopia, and Spain, the United States sought at first to bulwark its insular security by the Neutrality Act. As Axis aggression led to the outbreak of the European war in Sept., 1939, the United States still strove to stay out of it, despite increasing sympathy for the Allies. But after the fall of France in June, 1940, the support of the United States for beleaguered Britain became more overt. In Mar., 1941, lend-lease aid was extended to the British and, in November, to the Russians. The threat of war had already caused the adoption of selective service to build the armed strength of the nation. Hemisphere defense was enlarged, and the United States drew closer to Great Britain with the issuance of the Atlantic Charter.
In Asian affairs the Roosevelt government had vigorously protested Japan's career of conquest and its establishment of the “Greater East Asia Co-Prosperity Sphere.” After the Japanese takeover of French Indochina (July, 1941), with its inherent threat to the Philippines, the U.S. government froze all Japanese assets in the United States. Diplomatic relations grew taut, but U.S.-Japanese discussions were still being carried on when, on Dec. 7, 1941, Japanese bombs fell on Pearl Harbor. The United States promptly declared war, and four days later Germany and Italy declared war on the United States. (For an account of military and naval events.
The country efficiently mobilized its vast resources, transforming factories to war plants and building a mighty military force which included most able-bodied young men and many young women. The creation of a great number of government war agencies to control and coordinate materials, transportation, and manpower brought unprecedented government intervention into national life. Rationing, price controls, and other devices were instituted in an attempt to prevent serious inflation or dislocation in the civilian economy.
The war underscored the importance of U.S. resources and the prestige and power of the United States in world affairs. A series of important conferences outlined the policies for the war and the programs for the peace after victory; among these were the Moscow Conferences, the Casablanca Conference, the Cairo Conference, the Tehran Conference, and the Yalta Conference, at which Roosevelt, Winston Churchill, and Joseph Stalin planned for postwar settlement. Roosevelt was also a key figure in the plans for the United Nations.
After Roosevelt's sudden death in Apr., 1945, Harry S. Truman became President. A month later the European war ended when Germany surrendered on May 7, 1945. Truman went to the Potsdam Conference (July–August), where various questions of the peacetime administration of Europe were settled, many on an ad interim basis, pending the conclusion of peace treaties. Before the war ended with the defeat of Japan, the United States developed and used a fateful and revolutionary weapon of war, the atomic bomb. The Japanese surrender, announced Aug. 14, 1945, and signed Sept. 2, brought the war to a close.
Peacetime readjustment was successfully effected. The government's “G.I. Bill” enabled many former servicemen to obtain free schooling, and millions of other veterans were absorbed by the economy, which boomed in fulfilling the demands for long-unobtainable consumer goods. The shortening of the postwar factory work week and the proportionate reduction of wages precipitated a rash of strikes, causing the government to pass the Taft-Hartley Labor Act (1947). Some inflation occurred by 1947 as wartime economic controls were abandoned. Congress passed a host of Truman's measures relating to minimum wages, public housing, farm surpluses, and credit regulation; thus was instituted acceptance of comprehensive government intervention in times of prosperity. The nation's support of Truman's policies was signified when it returned him to the presidency in 1948 in an upset victory over Thomas E. Dewey.

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The most striking postwar development was America's new peacetime involvement in international affairs. U.S. support for the United Nations symbolized its desire for peace and order in international relations. However, relations between the United States and the Soviet Union worsened during the late 1940s. In addition, a serious human problem was presented by Europe, prostrated and near starvation after years of war. The Truman Doctrine attempted to thwart Soviet expansion in Europe; massive loans, culminating in the Marshall Plan, were vital in reviving European economies and thus in diminishing the appeal of Communism.
As the cold war intensified, the United States took steps (1948) to nullify the Soviet blockade of Berlin and played the leading role in forming a new alliance of Western nations, the North Atlantic Treaty Organization (NATO). In the Korean War, U.S. forces played the chief part in combating the North Korean and Chinese attack on South Korea. Thus the United States cast off its traditional peacetime isolationism and accepted its position as a prime mover in world affairs.
International policy had significant repercussions at home. The fear of domestic Communism and subversion almost became a national obsession, culminating in such sensational events as the Alger Hiss case and the trial and execution of Julius and Ethel Rosenberg. Security measures and loyalty checks in the government and elsewhere were tightened, alleged Communists were prosecuted under the Smith Act of 1940, and employees in varied fields were dismissed for questionable political affiliations, past or present. The most notorious prosecutor of alleged Communists was Senator Joseph McCarthy, whose extreme methods were later recognized as threats to freedom of speech and democratic principles.
Two decades of Democratic control of the White House came to an end with the presidential election of 1952, when Dwight D. Eisenhower was swept into office over the Democratic candidate, Adlai E. Stevenson. Although it did not try to roll back the social legislation passed by its Democratic predecessors, the Eisenhower administration was committed to a laissez-faire domestic policy. By the mid-1950s, America was in the midst of a great industrial boom, and stock prices were skyrocketing. In foreign affairs the Eisenhower administration was internationalist in outlook, although it sternly opposed Communist power and threatened “massive retaliation” for Communist aggression. Some antagonism came from the neutral nations of Asia and Africa, partly because of the U.S. association with former colonial powers and partly because U.S. foreign aid more often than not had the effect of strengthening ruling oligarchies abroad.
In the race for technological superiority the United States exploded (1952) the first hydrogen bomb, but was second to the USSR in launching (Jan. 31, 1958) an artificial satellite and in testing an intercontinental guidedmissile. However, spurred by Soviet advances, the United States made rapid progress in space exploration and missile research. In the crucial domestic issue of racial integration, the U.S. Supreme Court in a series of decisions supported the efforts of African-American citizens to achieve full civil rights. In 1959, Alaska and Hawaii became the 49th and 50th states of the Union. Despite hopes for “peaceful coexistence,” negotiations with the USSR for nuclear disarmament failed to achieve accord, and Berlin remained a serious source of conflict.
In 1961, the older Eisenhower gave way to the youngest President ever elected, John F. Kennedy, who defeated Republican candidate Richard M. Nixon. President Kennedy called for “new frontiers” of American endeavor, but had difficulty securing Congressional support for his domestic programs (integration, tax reform, medical benefits for the aged). Kennedy's foreign policy combined such humanitarian innovations as the Peace Corps and the Alliance for Progress with the traditional opposition to Communist aggrandizement.
After breaking relations with Cuba, which, under Fidel Castro, had clearly moved within the Communist orbit, the United States supported (1961) an ill-fated invasion of Cuba by anti-Castro forces. In 1962, in reaction to the presence of Soviet missiles in Cuba, the United States blockaded Soviet military shipments to Cuba and demanded the dismantling of Soviet bases there. The two great powers seemed on the brink of war, but within a week the USSR acceded to U.S. demands. In the meantime, the United States achieved an important gain in space exploration with the orbital flight around the earth in a manned satellite by Col. John H. Glenn. The tensions of the cold war eased when, in 1963, the United States and the Soviet Union reached an accord on a limited ban of nuclear testing.

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On Nov. 22, 1963, President Kennedy was assassinated while riding in a motorcade in Dallas, Tex. His successor, Lyndon B. Johnson, proclaimed a continuation of Kennedy's policies and was able to bring many Kennedy measures to legislative fruition. Significant progress toward racial equality was achieved with a momentous Civil Rights Act (1964), a Voting Rights Act (1965), and the 24th Amendment to the Constitution, which abolished the poll tax. Other legislation, reflecting Johnson's declaration of a “war on poverty” and his stated aim of creating a “Great Society,” included a comprehensive Economic Opportunity Act (1964) and bills providing for tax reduction, medical care for the aged, an increased minimum wage, urban rehabilitation, and aid to education.
Public approval was given in the landslide victory won by Johnson over his Republican opponent, Senator Barry Goldwater, in the 1964 presidential election. The victory also represented voter reaction against Senator Goldwater's aggressive views on foreign policy. Ironically, international problems dominated Johnson's second term, and Johnson himself pursued an aggressive course, dispatching (Apr., 1965) troops to the Dominican Republic during disorders there and escalating American participation in the Vietnam War. Authorization for the latter was claimed by Johnson to have been given (Aug., 1964) by Congress in the Tonkin Gulf resolution, which was passed after two U.S. destroyers were allegedly attacked by North Vietnamese PT boats in the Gulf of Tonkin. The federal military budget soared, and inflation became a pressing problem.
The Vietnam War provoked increasing opposition at home, manifested in marches and demonstrations in which casualties were sometimes incurred and thousands of people were arrested. An impression of general lawlessness and domestic disintegration was heightened by serious race riots that erupted in cities across the nation, most devastatingly in the Watts district of Los Angeles (1965) and in Detroit and Newark (1967), and by various racial and political assassinations, notably those of Martin Luther King, Jr., and Senator Robert F. Kennedy (1968). Other manifestations of social upheaval were the increase of drug use, especially among youths, and the rising rate of crime, most noticeable in the cities. Opposition to American involvement in the Vietnam War so eroded Johnson's popularity that he chose not to run again for President in 1968.

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Johnson's position as leader of the Democratic party had been seriously challenged by Senator Eugene McCarthy, who ran as a peace candidate in the primary elections. Antiwar forces in the Democratic party received a setback with the assassination of Senator Kennedy, also a peace candidate, and the way was opened for the nomination of Vice President Hubert H. Humphrey, a supporter of Johnson's policies, as the Democratic candidate for President. Violence broke out during the Democratic national convention in Chicago when police and national guardsmen battled some 3,000 demonstrators in what a national investigating committee later characterized as “a police riot.” The Republican candidate, Richard M. Nixon, ran on a platform promising an end to the Vietnam War and stressing the need for domestic “law and order”; he won a narrow victory, receiving 43.4% of the popular vote to Humphrey's 42.7%. A third-party candidate, Gov. George C. Wallace of Alabama, carried five Southern states. The Congress remained Democratic.
Pronouncing the “Nixon doctrine”—that thenceforth other countries would have to carry more of the burden of fighting Communist domination, albeit with substantial American economic aid—Nixon began a slow withdrawal of American troops from Vietnam. Criticism that he was not moving fast enough in ending the war increased and massive antiwar demonstrations continued, and when Nixon in the spring of 1970 ordered U.S. troops into neutral Cambodia to destroy Communist bases and supply routes there, a wave of demonstrations, some of them violent, swept American campuses. Four students were killed by national guardsmen at Kent State Univ. in Ohio, and 448 colleges and universities temporarily closed down. Antiwar activity declined, however, when American troops were removed from Cambodia after 60 days.
The institution of draft reform, the continued withdrawal of U.S. soldiers from Vietnam, and a sharp decrease in U.S. casualties all contributed toward dampening antiwar sentiment and lessening the war as an issue of public debate. Racial flare-ups abated after the tumult of the 1960s (although the issue of the busing of children to achieve integration continued to arouse controversy). The growing movement of women demanding social, economic, and political equality with men also reflected the changing times. A dramatic milestone in the country's space program was reached in July, 1969, with the landing of two men on the moon, the first of several such manned flights. Significant unmanned probes of several of the planets followed, and in 1973 the first space station was orbited.
In domestic policy Nixon appeared to favor an end to the many reforms of the 1960s. He was accused by civil-rights proponents of wooing Southern support by seeking delays in the implementation of school integration. Such actions by his administration were overruled by the Supreme Court. Nixon twice attempted to appoint conservative Southern judges to the U.S. Supreme Court and was twice frustrated by the Senate, which rejected both nominations. In an attempt to control the spiraling inflation inherited from the previous administration, Nixon concentrated on reducing federal spending. He vetoed numerous appropriations bills passed by Congress, especially those in the social service and public works areas, although he continued to stress defense measures, such as the establishment of an antiballistic missiles (ABM) system, and foreign aid.
Federal budget cuts contributed to a general economic slowdown but failed to halt inflation, so that the country experienced the unprecedented misfortune of both rising prices and rising unemployment; the steady drain of gold reserves after almost three decades of enormous foreign aid programs, a new balance-of-trade deficit, and the instability of the dollar in the international market also affected the economy. In Aug., 1971, Nixon resorted to the freezing of prices, wages, and rents; these controls were continued under an ensuing, more flexible but comprehensive program known as Phase II. Another significant move was the devaluation of the dollar in Dec., 1971; it was further devalued in 1973 and again in 1974.
In keeping with his announced intention of moving the United States from an era of confrontation to one of negotiation, Nixon made a dramatic visit to the People's Republic of China in Feb., 1972, ending more than 20 years of hostility between the two countries and opening the way for a normalization of relations. A trip to Moscow followed in the spring, culminating in the signing of numerous agreements between the United States and the Soviet Union, the most important being two strategic arms limitations accords, reached after lengthy talks begun in 1969. The attainment of a degree of friendly relations with China and the USSR was especially surprising in view of the provocative actions that the United States was taking at that time against North Vietnam. Although U.S. ground troops were being steadily withdrawn from Vietnam, U.S. bombing activity was increasing. Finally Congress halted the bombing and limited Nixon's power to commit troops. A cease-fire in Vietnam was not achieved until Jan., 1973.
In the presidential election of 1972, the Democratic party reforms that increased the power of women and minority groups in the convention resulted in the nomination of Senator George S. McGovern for President. Senator McGovern called for an immediate end to the Vietnam War and for a drastic cut in defense spending and a guaranteed minimum income for all citizens. His candidacy was damaged by the necessity to replace his original choice for Vice President and by the continuing perception of McGovern as a radical. Nixon was reelected (Nov., 1972) in a landslide, losing only Massachusetts and the District of Columbia.
But Nixon's second term was marred, and finally destroyed, by the Watergate affair, which began when five men (two of whom were later discovered to be direct employees of Nixon's reelection committee) were arrested after breaking into the Democratic party's national headquarters at the Watergate apartment complex in Washington, D.C. Nixon resigned on Aug. 9, the first president in the history of the republic to be driven from office under the threat of impeachment.

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Nixon was succeeded by Vice President Gerald R. Ford. (Nixon's first Vice President, Spiro T. Agnew, had resigned in Oct., 1973, after being charged with income tax evasion.) Ford promised to continue Nixon's foreign policy, particularly the improvement of relations with China and the USSR (in his last days in office, Nixon had made trips to the Middle East and the Soviet Union to promote peace).
In domestic affairs, the United States was hurt by skyrocketing fuel prices due to an Arab oil embargo. The embargo was imposed (1973) in retaliation for U.S. support of Israel in the Yom Kippur War. Ford attempted to formulate new policies to stem the ever-increasing inflation rate, which by late 1974 had reached the most severe levels since the period following World War II. He was also confronted with mounting unemployment and with the threat of a devastating world food crisis. Ford's popularity suffered a sharp setback when he granted Nixon a complete and unconditional pardon for any crimes that Nixon may have committed during his term as President. The public disapproval of this decision, along with the deteriorating economy, contributed to a sharp reversal in Republican fortunes in the elections of 1974.
In Dec., 1974, Nelson A. Rockefeller, a former governor of New York, was sworn in as Vice President following extensive hearings before Congressional committees. Thus, neither the President nor the Vice President had been popularly elected, both having been chosen under the terms of the Twenty-fifth Amendment. Ford's tenure as President was hindered by difficult economic times and an inability to work with the Democrat-controlled Congress. Ford vetoed dozens of bills, many of which were overridden by Congress to provide funding for social programs. Ford also lacked broad support within his own party, as former California governor (and future President) Ronald Reagan made a strong challenge for the Republican presidential nomination.
The Democratic contender in the 1976 presidential election, former Georgia governor James E. “Jimmy” Carter, ran a brilliant and tireless campaign based on populist appeals to honesty and morality. His position as a newcomer to national politics was considered an asset by an untrusting nation in the wake of the Watergate scandal. In spite of a late surge by Ford, Carter narrowly won the election. The day after being sworn in as President, Carter pardoned thousands of draft evaders from the Vietnam War. In domestic affairs, Carter focused a great deal of attention on energy issues, creating the Department of Energy in 1977 and insisting on the necessity of nuclear energy as an alternative to fossil fuel consumption. However, nuclear energy in the United States suffered a severe setback in 1979 when an accident at the Three Mile Island power facility near Harrisburg, Penn. resulted in the partial meltdown of the reactor core.
States with large energy industries such as Texas, Louisiana, Wyoming, and Colorado all benefited from extremely high energy prices throughout the 1970s. Alaska's economy also boomed as the Alaska pipeline began transporting oil in 1977. Soaring oil prices as well as increased foreign competition dealt a severe blow to American industry, especially heavy industries such as automobile and steel manufacturing located in America's Rust Belt. Central cities in the United States experienced great hardship in the 1960s and 70s. Rising crime rates and racial unrest during the 1960s accelerated the outmigration of people and businesses to the suburbs. By the late 1970s, many large cities had lost their middle class core populations and suffered severe budgetary problems.
Inflation continued to rise dramatically as it had during Ford's administration and eventually reached a 30-year high in 1979. Efforts to control inflation such as raising interest rates plunged the economy into recession. In 1977 Carter signed the Panama Canal Treaty and a year later Congress voted to turn over the canal to Panama in 1999. Carter's greatest achievement in foreign policy came in 1978 when he mediated unprecedented negotiations between Egypt and Israel at Camp David, Md. The talks led to the signing of a peace treaty by Egyptian president Anwar al-Sadat and Israeli prime minister Menachem Begin in 1979. Also in that year the United States resumed official diplomatic relations with China and Carter entered into a second round of Strategic Arms Limitation Talks (SALT II) with the Soviet Union.
Carter's pledge to stand against nations that abused human rights resulted in a grain and high-technology embargo of the Soviet Union in response to the Soviet invasion of Afghanistan. Carter also organized a boycott of the 1980 Moscow Olympics. His decision in 1979 to allow Muhammad Reza Shah Pahlevi, the deposed leader of Iran, to receive medical treatment in the United States inflamed the already passionate anti-American sentiment in that nation. On Nov. 4, 1979, a group of militants seized the U.S. embassy in Iran, taking 66 hostages. The Iran hostage crisis destroyed Carter's credibility as a leader and a failed rescue attempt (1980) that killed eight Americans only worsened the situation. (The hostages were only released on Jan. 20, 1981, the day Carter left office.) With the hostage crisis omnipresent in the media and the nation's economy sliding deeper into recession, Carter had little to run on in the 1980 presidential election. Republican nominee Ronald Reagan promised to restore American supremacy both politically and economically.

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The nation enthusiastically responded to Ronald Reagan's neoconservative message as he soundly defeated Carter and third-party candidate John Anderson to become, at the age of 70, the oldest man to be elected president. Reagan's coattails proved to be long as the Republicans made large gains in the House of Representatives and won control of the Senate for the first time since 1954, ushering in a new wave of conservatism. His program of supply-side economics sought to increase economic growth through reduced taxes which would in turn create even greater tax revenue. Critics argued that his tax cuts only benefited corporations and wealthy individuals. Reagan drastically cut spending on social programs as part of his vow to balance the federal budget.
In labor disputes, Reagan was decidedly antiunion. This was never more evident than in 1981 when he fired 13,000 striking air traffic controllers. In Mar., 1981, Reagan was wounded in an assassination attempt but fully recovered, dispelling doubts regarding his age and health. The U.S. economy continued to worsen; in 1983 the unemployment rate reached its highest point since the Great Depression at almost 11%. By the end of that year, however, oil prices began to drop, slowing the inflation rate and helping the economy to begin a recovery. Reagan's deregulaton of the banking, airline, and many other industries spurred enormous amounts of economic activity. In 1984 the unemployment rate fell and the dollar was strong in foreign markets. With the economy recovering, Reagan was unstoppable in the 1984 presidential election.
Democratic nominee Walter F. Mondale chose U.S. Representative Geraldine Ferraro as his running mate; she was the first woman to gain a major party's vice presidential nomination. Reagan scored an overwhelming victory, carrying 49 states and winning a record 525 electoral votes. Economic recovery did not last, however; while Reagan was cutting government funding for social programs the defense budget skyrocketed to levels not seen since World War II. The federal budget deficit also soared and in 1987, Reagan submitted the first trillion-dollar budget to Congress. In addition, the deregulated economy proved extremely volatile; financial scandals were prevalent and the trade imbalance grew. Finally in 1987 the stock market crashed, falling a record 508 points in a single day.
Reagan's foreign policy was aggressively anti-Communist as he discarded the policy of détente employed by Nixon, Ford, and Carter. He revived Cold War rhetoric, referring to the Soviet Union as the “evil empire” and used increased defense spending to enlarge the U.S. nuclear arsenal and fund the Strategic Defense Initiative, a plan popularly known as “Star Wars.” In 1981, Reagan imposed sanctions against Poland after the establishment of a military government in that country. Reagan also sought aid for the Contras—counterrevolutionaries seeking to overthrow the Marxist-oriented Sandanista government in Nicaragua. At the same time the United States was secretly mining Nicaraguan harbors.
In 1983 241 U.S. marines stationed in Beirut, Lebanon as part of a UN peacekeeping force were killed by terrorists driving a truck laden with explosives in a suicide mission. Later that year Reagan ordered the invasion of the tiny Caribbean nation of Grenada; the action was roundly criticized by the world community, but succeeded in toppling the pro-Cuban regime. In 1986 the space shuttle Challenger exploded shortly after liftoff, killing the entire seven-person crew, including six astronauts and a civilian schoolteacher. Reagan's aggressive policies in the Middle East worsened already bad relations with Arab nations; he ordered (1986) air strikes against Libya in retaliation for the Libyan-sponsored terrorist attack in West Berlin that killed two American servicemen.
Although the president had vowed never to negotiate with terrorists, members of his administration did just that in the Iran-contra affair. Against the wishes of the Secretary of State and the Secretary of Defense, Reagan officials arranged the illegal sale of arms to Iran in exchange for the release of American hostages in the Middle East. The profits from the sales were then diverted to the Contra rebels in Nicaragua. Reagan improved his image before he left office, however, by agreeing to a series of arms reduction talks initiated by Soviet president Mikhail Gorbachev. Reagan was also able leave a powerful legacy by appointing three conservative Supreme Court justices, including Sandra Day O'Connor, the first woman to serve on the high court.

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Reagan had groomed his Vice President, George H. W. Bush, to succeed him. The presidential election of 1988 was characterized by negative campaigning, low voter turnout, and a general disapproval of both candidates. The mudslinging especially hurt the Democratic nominee, Massachusetts governor Michael Dukakis, who rapidly lost his lead in the polls and eventually lost by a substantial margin. Bush vowed a continuation of Reagan's policies and in foreign affairs he was as aggressive as his predecessor. In 1989, after a U.S.-backed coup failed to oust Panamanian President Manuel Noriega, Bush ordered the invasion of Panama by U.S. troops. Noriega was eventually captured in early 1990 and sent to Miami, Fla. to stand trial for drug trafficking.
Bush's major military action, however, was the Persian Gulf War. After Iraq invaded Kuwait on Aug. 2, 1990, Bush announced the commencement of Operation Desert Shield, which included a naval and air blockade and the steady deployment of U.S. military forces to Saudi Arabia. In November the United Nations Security Council approved the use of all necessary force to remove Iraq from Kuwait and set Jan. 15, 1991, as the deadline for Iraq to withdraw. A few days before the deadline Congress narrowly approved the use of force against Iraq. By this time the United States had amassed a force of over 500,000 military personnel as well as thousands of tanks, airplanes, and personnel carriers. Less than one day after the deadline, the U.S.-led coalition began Operation Desert Storm, beginning with massive air attacks on Baghdad. Iraqi troops were devastated by continual air and naval bombardment, to the point that it took only 100 hours for coalition ground forces to recapture Kuwait. On Feb. 27, with the Iraqi army routed, Bush declared a cease-fire.
The quick, decisive U.S. victory, combined with an extremely small number of American casualties, gave President Bush the highest public approval rating in history. Mounting domestic problems, however, made his popularity short-lived. When Bush took office, he announced a plan to bail out the savings and loan industry, which had collapsed after deregulation during the Reagan administration. In 1991 it was estimated that it would cost taxpayers $500 billion to save the industry.
The United States went through a transitional period during the 1980s and early 90s, economically, demographically, and politically. The severe decline of traditional manufacturing which began in the 1970s forced a large-scale shift of the economy to services and other sectors. States with large service, trade, and high-technology industries (such as many Sun Belt states) grew in population and thrived economically. Meanwhile, states heavily dependent on manufacturing, including much of the Midwest, suffered severe unemployment and outmigration. Midwestern states grew less than 5% during the 1980s while Sun Belt states grew between 15% and 50%.
In addition, the end of the Cold War, precipitated by the dissolution of the Warsaw Pact and the collapse of Soviet Communism, resulted in a reduction of the U.S. armed forces as well as the opening of new markets in an increasingly global economy. In Apr., 1992, after the severe police beating of an African American, one of the worst race riots in recent U.S. history erupted in Los Angeles, killing 58, injuring thousands, and causing approximately $1 billion in damage. Smaller disturbances broke out in many U.S. cities. After the Persian Gulf War the nation turned its attention to the domestic problems of recession and high unemployment. Bush's inability to institute a program for economic recovery made him vulnerable in the 1992 presidential election to the Democratic nominee, Arkansas governor Bill Clinton.
Clinton won the election, gaining 43% of the popular vote and 370 electoral votes. Incumbent Bush won 38% of the popular vote and 168 electoral votes. Although independent candidate H. Ross Perot did not win a single electoral vote, he made a strong showing with 19% of the popular vote, after a populist campaign in which he vowed to eliminate the $3.5 trillion federal deficit. Clinton, generally considered a political moderate, was particularly successful in appealing to voters (especially in the Midwest and West) who had previously abandoned the Democratic party to vote for Reagan. Bush, for his part, was unable to convince voters that he could transform his success in international affairs into domestic recovery. One of his last actions as president was to send (Dec., 1992) U.S. troops to Somalia as part of a multinational peacekeeping force administering famine relief.
The economy gradually improved during Clinton's first year in office, and this, along with a tax increase and spending cuts, caused some easing of the budget deficit. The North American Free Trade Agreement, signed by the United States, Canada, and Mexico in 1992 and designed to make its participants more competitive in the world marketplace, was ratified in 1993 and took effect Jan. 1, 1994.
During his first two years in office, Clinton withdrew U.S. troops from Somalia after they had suffered casualties in an ill-defined mission; he also sent troops to Haiti to help in reestablishing democratic rule there. The president proposed a major overhaul of the way American health care is financed, but it died in Congress. Clinton's problems with Congress were exacerbated in 1994 after the Republicans won control of both the Senate and the House and attempted, largely unsuccessfully, to enact a strongly conservative legislative program, dubbed the “Contract with America.” There were prolonged stalemates as the president and Congress clashed over the federal budget; in Apr., 1996, a fiscal 1995 budget was agreed upon after seven months of stopgap spending measures and temporary government shutdowns.
In Apr., 1995, in the worst act of terrorism ever on American soil, a bomb was exploded at the federal building in Oklahoma City, Okla., killing 169 people. Late in 1995, the antagonists in the Yugoslavian civil war accepted a U.S.-brokered peace plan, which U.S. troops were sent to help monitor. U.S. efforts also contributed to Arab-Israeli acceptance of agreements to establish limited Palestinian self-rule in the West Bank and Gaza.
By 1996, President Clinton had improved his standing in the polls by confronting House Republicans over the federal budget, and he subsequently adopted a number of Republican proposals, such as welfare reform, as his own, while opposing the more conservative aspects of those proposals. Clinton won his party's renomination unopposed and then handily defeated Republican Bob Dole and Reform party candidate Ross Perot in the November election.
As his second term began, Clinton's foes in and out of Congress pursued investigation of Whitewater and other alleged improprieties or abuses by the president. By late 1997 independent prosecutor Kenneth Starr had been given information that led to the Lewinsky scandal, which burst on the national scene in early 1998. Battle lines formed and remained firm through Clinton's impeachment (Oct., 1998), trial (Jan., 1999), and acquittal (Feb., 1999), with a core of conservative Republicans on one side and almost all Democrats on the other. The American people seemed to regard the impeachment as largely partisan in intent. Lying behind their attitude, however, was probably the sustained economic boom, a period of record stock-market levels, relatively low unemployment, the reduction of the federal debt, and other signs of well-being (although critics noted that the disparity between America's rich and poor was now greater than ever). This, combined with the afterglow of “victory” in the cold war, continued through the end of the 1990s.
In foreign affairs, the United States (as the only true superpower) enjoyed unprecendented international influence in the late 1990s, and in some areas it was able to use this influence to accomplish much. There was steady, if sometimes fitful, progress toward peace in the Middle East, and George Mitchell, a U.S. envoy, brokered what many hoped was a lasting peace in Northern Ireland. On the other hand, America had little influence on Russian policy in Chechnya, and it remained locked in a contest of wills with Iraq's President Saddam Hussein nine years after the end of the Persian Gulf War. The reluctance of the Congress to pay the country's UN dues nearly led to the embarrassment of the loss of the American General Assembly vote in 1999 even as Secretary-General Kofi Annan expressed a desire for greater American involvement in the organization.
Meanwhile, in Kosovo the North Atlantic Treaty Organization, led by the United States, was unable to prevent a Yugoslav campaign against Kosovar Albanians but ultimately forced Yugoslavia (now Serbia and Montenegro) to cede contral of the province; U.S. and other troops were sent into Kosovo as peacekeepers. That conflict showed that the United States was again reluctant to commit military forces, such as its army, that were likely to suffer significant casualties, although it would use its airpower, where its great technological advantages enabled it strike with less risk to its forces.
Negotiations in the Middle East, which continued in 2000, broke down, and there was renewed violence in Israel, Gaza, and the West Bank late in the year. The Clinton administration worked to restart the negotiations, but the issues proved difficult to resolve. In the United States, the Nasdaq Internet and technology stock bubble, which had begun its rise in 1999, completely deflated in the second half of 2000, as the so-called new economy associated with the Internet proved to be subject to the rules of the old economy. Signs of a contracting economy also appeared by year's end.
The 2000 presidential election, in which the American public generally appeared uninspired by the either major-party candidate (Vice President Al Gore and the Republican governor of Texas, George W. Bush) ended amid confusion and contention not seen since the Hayes-Tilden election in 1876. On election night, the television networks called and then retracted the winner of Florida twice, first projecting Gore the winner there, then projecting Bush the winner there and in the race at large. The issue of who would win Florida and its electoral votes became the issue of who would win the presidency, and the determination of the election dragged on for weeks as Florida's votes were recounted. Gore, who trailed by several hundred votes (out of 6 million) in Florida but led by a few hundred thousand nationally, sought a manual recount of strongly Democratic counties in Florida, and the issue ended up being fought in the courts and in the media. Ultimately the U.S. Supreme Court called a halt to the process, although its split decision along ideological lines was regarded by many as tarnishing the court. Florida's electoral votes, as certified by the state's Republican officials, were won by Bush, who secured a total of 271 electoral votes (one more than needed) and 48% of the popular vote (Gore had 49% of the popular vote). Bush thus became the first person since Benjamin Harrison in 1888 to win the presidency without achieving a plurality in the popular vote.
The slowing economy entered a recession in Mar., 2001, and unemployment rose, leading to continued interest rate reductions by the Federal Reserve Bank. The Bush administration moved quickly to win Congressional approval of its tax-cut program, providing it with an early legislative victory, but other proposed legislation moved more slowly. The resignation of Senator Jeffords of Vermont from the Republican party cost it control of the Senate, a setback due in part to administration pressure on him to adhere to the party line. Internationally, the United States experienced some friction with its allies, who were unhappy with the Bush administration's desire to abandon both the Kyoto Protocal (designed to fight global warming) and the Antiballistic Missile Treaty (in order to proceed with developing a ballistic missile defense system). Relations with China were briefly tense in Apr., 2001, after a Chinese fighter and U.S. surveillance plane collided in mid-air, killing the Chinese pilot.
The politics and concerns of the first eight months of 2001 abruptly became secondary on Sept. 11, when terrorists hijacked four planes, crashing two into the World Trade Center, which was destroyed, and one into the Pentagon; the fourth crashed near Shanksville, Pa. Some 3,000 persons were killed or missing as a result of the attacks. Insisting that no distinction would be made between terrorists and those who harbored them, Bush demanded that Afghanistan's Taliban government turn over Osama bin Laden, a Saudi-born Islamic militant whose Al Qaeda group was behind the attacks. The U.S. government sought to build an international coalition against Al Qaeda and the Taliban and, more broadly, against terrorism, working to influence other nations to cut off sources of financial support for terrorists.
In October, air strikes and then ground raids were launched against Afghanistan by the United States, with British aid. Oman, Pakistan, and Uzbekistan permitted the use of their airspace and of bases within their borders for various operations. The United States also provided support for opposition forces in Afghanistan, and by December the Taliban government had been ousted and its and Al Qaeda's fighters largely had been routed. Bin Laden, however, remained uncaptured, and a force of U.S. troops was based in Afghanistan to search for him and to help with mopping-up operations.
The terrorist attacks stunned Americans and amplified the effects of the recession in the fall. Events had a severe impact on the travel industry, particularly the airlines, whose flights were temporarily halted; the airlines subsequently suffered a significant decrease in passengers. Congress passed several bills designed to counter the economic effects of the attacks, including a $15 billion aid and loan package for the airline industry. A new crisis developed in October, when cases of anthrax and anthrax exposure resulted from spores that had been mailed to media and government offices in bioterror attacks.
Although consumer spending and the stock market rebounded by the end of the year from their low levels after September 11, unemployment reached 5.8% in Dec., 2001. Nonetheless, the economy was recovering, albeit slowly, aided in part by increased federal spending. In early 2002 the Bush administration announced plans for a significant military buildup; that and the 2001 tax cuts were expected to result in budget deficits in 2002–4. Prompted by a number of prominent corporate scandals involving fraudulent or questionable accounting practices, some of which led to corporate bankruptcies, Congress passed legislation that overhauled securities and corporate laws in July, 2002.
The fighting in Afghanistan continued, with U.S. forces there devoted mainly to mopping up remnants of Taliban and Al Qaeda forces. U.S. troops were also based in Pakistan, Kyrgyzstan, and Uzbekistan to provide support for the forces in Afghanistan. In the Philippines, U.S. troops provided support and assistance to Philippine forces fighting guerrillas in the Sulu Archipelago that had been linked to Al Qaeda, and they also trained Georgian and Yemeni forces as part of the war on terrorism.
During 2002 the Bush administration became increasingly concerned by the alleged Iraqi development and possession of weapons of mass destruction, and was more forceful in its denunciations of Iraq for resisting UN arms inspections. In March, Arab nations publicly opposed possible U.S. military operations against Iraq, but U.S. officials continued to call for the removal of Saddam Hussein. President Bush called on the United Nations to act forcefully against Iraq or risk becoming “irrelevant.” In November the Security Council passed a resolution offering Iraq a “final opportunity” to cooperate on arms inspections, this time under strict guidelines, and inspections resumed late in the month, although not with full Iraqi cooperation. Meanwhile, the U.S. Congress voted to authorize the use of the military force against Iraq, and the United States continued to build up its forces in the Middle East.
The November election resulted in unexpected, if small, gains for the Republicans, giving them control of both houses of Congress. After the election, Congress voted to establish a new Department of Homeland Security, effective Mar., 2003. The department regrouped most of the disparate agencies responsible for domestic security under one cabinet-level official; the resulting government reorganization was the largest since the Department of Defense was created in the late 1940s.
Dec., 2002, saw the negotiation of a free-trade agreement with Chile (signed in June, 2003), regarded by many as the first step in the expansion of NAFTA to include all the countries of the Americas. President Bush ordered the deployment of a ballistic missile defense system, to be effective in 2004; the system would be designed to prevent so-called rogue missile attacks. In advance of this move the United States had withdrawn from the Anti-Ballistic Missile treaty with Russia in June. North Korea, often described as one of the nations most likely to launch a rogue attack, had admitted in October that it had a program for developing nuclear weapons, and the United States and other nations responded by ending fuel shipments and reducing food aid. In the subsequent weeks North Korea engaged in a series of well-publicized moves to enable it to resume the development of nuclear weapons, including withdrawing from the nuclear nonproliferation treaty. The United States, which had first responded by refusing to negotiate in any way with North Korea, adopted a somewhat less confrontational approach in 2003.
President Bush continued to press for Iraqi disarmament in 2003, and expressed impatience with what his administration regarded as the lack of Iraqi compliance. In Feb, 2003, however, the nation's attention was pulled away from the growing tension over Iraq by the breakup of the space shuttle Columbia as it returned to earth. Seven astronauts were killed in this second shuttle mishap, and focus was once again directed toward the issues of the safety of the space shuttle and the dynamics of the decision-making process at NASA.
Despite vocal opposition to military action from many nations, including sometimes rancorous objections from France, Germany, and Russia, the United States and Great Britain pressed forward in early 2003 with military preparations in areas near Iraq. Although Turkey, which the allies hoped to use as a base for opening a northern front in Iraq, refused to allow use of its territory as a staging area, the bulk of the forces were nonetheless in place by March. After failing to win the explicit UN Security Council approval desired by Britain (because the British public were otherwise largely opposed to war), President Bush issued an ultimatum to Iraqi president Saddam Hussein on March 17th, and two days later the war began with an airstrike against Hussein and the Iraqi leadership. Ground forces invaded the following day, and by mid-April the allies were largely in control of the major Iraqi cities and had turned their attention to the rebuilding of Iraq and the establishment of a new Iraqi government. No weapons of mass destruction, however, were found by allied forces during the months after the war, and sporadic guerrilla attacks on the occupying forces occurred during the same time period, mainly in Sunni-dominated central Iraq.
The cost of the military campaign as well as of the ongoing U.S. occupation in Iraq substantially increased what already had been expected to be a record-breaking U.S. deficit in 2003 to around $374 billion. The size of the deficit, the unknown ultimate cost of the war, and the continued weak U.S. economy (the unemployment rate rose to 6.4% in June despite some improvement in other areas) were important factors that led to the scaling back of a tax cut, proposed by President Bush, by more than half to $350 billion.
In Aug., 2003, a massive electrical blackout affected the NE United States. Much of New York and portions of Vermont, Massachusetts, Connecticut, New Jersey, Pennsylvania, Ohio, Michigan, and neighboring Ontario, Canada, lost power, in many cases for a couple days. The widespread failure appeared to be due in part to strains placed on the transmission system, its safeguards, and its operators by the increased interconnectedness of electrical generation and transmission facilities and the longer-distance transmission of electricity. An investigation into the event, however, laid the primary blame on the Ohio utility where it began, both for inadequate system maintenance and for failing to take preventive measures when the crisis began.
The economy improved in the latter half of the 2003. Although the unemployment rate inched below 6% and job growth was modest, overall economic growth was robust, particularly in the last quarter. A major Medicare overhaul was enacted and signed in December, creating a prescription drug benefit for the first time. The same month the Central American Free Trade Agreement was finalized by the United States, Guatemala, Honduras, El Salvador, and Nicaragua, and in early 2004, Costa Rica and the Dominican Republic agreed to become parties to the accord. The United States also reached free-trade agreements with Australia and Morocco.
U.S. weapons inspectors reported in Jan., 2004, that they had failed to find any evidence that Iraq had possessed biological or chemical weapons stockpiles prior to the U.S. invasion. The assertion that such stockpiles existed was a primary justification for the invasion, and the report led to pressure for an investigation of U.S. intelligence prior to the war. In February, President Bush appointed a bipartisan commission to review both U.S. intelligence failures in Iraq and other issues relating to foreign intelligence; the commission's 2005 report criticized intelligence agencies for failing to challenge the conventional wisdom about Iraq's weapon systems, and called for changes in how U.S. intelligence gathering is organized and managed. The Senate's intelligence committee, reviewing the situation separately, concluded in its 2004 report that much of the CIA's information on and assessment of Iraq prior to the war was faulty.
Also in February, U.S., French, and Canadian forces were sent into Haiti to preserve order. Haitian president Jean-Bertrand Aristide had resigned under U.S.-French pressure after rebel forces had swept through most of the country and threatened to enter the capital. U.S. forces withdrew from Haiti in June when Brazil assumed command of a UN peacekeeping force there.
By March, John Kerry had all but secured the Democrat nomination for president. With both major party nominees clear, the focus of the political campaigns quickly shifted to the November election. Both Bush and Kerry had elected not to accept government funding, enabling them each to raise record amounts of campaign funding, and the post-primary advertising campaign began early. In July, Kerry chose North Carolina senator John Edwards, who had opposed him in the primaries, as his running mate.
U.S. forces engaged in intense fighting in Iraq in Apr., 2004, as they attempted to remove Sunni insurgents from the town of Falluja. The battling there was the fiercest since the end of the invasion, and ultimately U.S. forces broke off without clearing the fighters from the city, a goal that was not achieved until after similar fighting in November. Guerrilla attacks by Sunni insurgents continued throughout the year. Also in April a radical cleric attempted to spark a Shiite uprising, and there was unrest and fighting in a number of other Iraqi cities. By mid-April the Shiite militia was in control only in the region around An Najaf, but the militia did not abandon its hold there until after intense battling in August. At the end of June, Paul Bremer, the head of the U.S.-led Coalition Provisional Authority, turned over sovereignty to an Iraqi interim government. Nonetheless, the unrest called into question the degree to which Iraq had been pacified, and the 160,000 U.S.-led troops still in Iraq were, for the time being, the true guarantor of Iraqi security. Meanwhile, the prestige of the U.S. military had been damaged by revelations, in May, that it had abused Iraqis held in the Abu Ghraib prison during 2003–4.
In July, 2004, the U.S. commission investigating the terror attacks of Sept. 11, 2001, criticized especially U.S. intelligence agencies for failings that contributed to the success of the attacks, and called for a major reorganization of those agencies, leading to the passage of legislation late in the year. In the following months the country's focus turned largely toward the November presidential election, as the campaigns of President Bush and Senator Kerry and their surrogates escalated their often sharp political attacks. In a country divided over the threat of terrorism and the war in Iraq, over the state of the economy and the state of the nation's values, election spending reached a new peak despite recent campaign financing limitations, and fueled a divisive and sometimes bitter mood. Ultimately, the president appeared to benefit from a slowly recovering economy and the desire of many voters for continuity in leadership while the nation was at war. Amid greatly increased voter turnout, Bush secured a clear majority of the popular vote, in sharp contrast to the 2000 election that first made him president. Republicans also increased their margins of control in both houses of Congress, largely through victories in the more conservative South.
The very active 2005 hurricane season saw several significant storms make landfall on the U.S. coast. In August, Hurricane Katrina devastated the Mississippi and SE Louisiana coasts, flooded much of New Orleans for several weeks, and caused extensive destruction inland in Louisiana, Mississippi, and Alabama, making it the most expensive natural disaster in U.S. history. The following month, Hurricane Rita caused devastation along the SW Louisiana coast and widespread destruction in inland Louisiana and SE Texas.
Katrina displaced many Louisiana residents, some permanently, to other parts of the state and other states, particularly Texas. Some 200,000 persons were left at least temporarily unemployed, reversing job gains that had been made in the preceding months. The storm had a noticeable effect on the economy, driving up the already higher prices of gasoline, heating oil, and natural gas (as a result of well and refinery damage) to levels not seen before, and causing inflation to rise and industrial output to drop by amounts not seen in more than two decades.
The striking ineffectiveness of federal, state, and local government in responding to Hurricane Katrina, particularly in flooded New Orleans but also in other areas affected by the storm, raised questions about the ability of the country to respond to major disasters of any kind. President Bush—and state and local officials—were criticized for responding, at least initially, inadequately to Katrina, but the Federal Emergency Management Agency in particular seemed overwhelmed by the disaster's scale and incapable of managing the federal response in subsequent weeks. Many Americans wondered if the lessons of the events of Sept. 11, 2001, and the changes in the federal government that followed had resulted in real improvements or if those very changes and their emphasis on terror attacks had hindered the ability of the United States to respond to natural disasters.
The perceived failings in the federal response to Katrina seemed to catalyze public dissatisfaction with President Bush, as Americans became increasingly unsettled by the ongoing war in Iraq, the state of the U.S. economy, and other issues less than a year after Bush had been solidly reelected. Congress, meanwhile, passed a $52 billion emergency spending bill to deal with the effects of Katrina, but did not make any significant spending cuts or reductions in tax cuts to compensate for the additional outlays until Feb., 2006, when Congress passed a bill cutting almost $40 billion from a variety of government benefit programs, including Medicare, Medicaid, and student loans.
Internationally and domestically, the United States government was the subject of condemnation from some quarters for aspects of its conduct of the “war on terror” in the second half of 2005. In Aug., 2005, Amnesty International denounced the United States for maintaining secret, underground CIA prisons abroad. Subsequent news reporting indicated that there were prisons in eight nations in E Europe and Asia, and in December the United States acknowledged that the International Committee of the Red Cross had not been given access to all its detention facilities. A Swiss investigator for the Council of Europe indicated (Dec., 2005) that reports that European nations and the United States had been involved in the abduction and extrajudicial transfer of individuals to other nations were credible, and he accused (Jan., 2006) the nations of “outsourcing” torture. In Jan., 2006, the New York–based Human Rights Watch accused the U.S. government of a deliberate policy of mistreating terror suspects.
In Dec., 2005, the National Security Agency was revealed to be wiretapping some international communications originating in the United States without obtaining the legally required warrants. The practice had begun in 2002, at the president's order. The administration justified it by asserting that the president's powers to defend the United States under the Constitution were not subject to Congressional legislation and that the legislation authorizing the president to respond to the Sept., 2001, terror attacks implicitly also authorized the wiretapping. Many politicians, former government officials, and legal scholars, however, criticized the practice as illegal or unconstitutional. The revelations and assertions did not derail the renewal of those parts of the USA PATRIOT Act, a sometimes criticized national security law originally enacted in 2001 after the Sept. 11th attacks; with only minor adjustments most of the law was made permanent in Mar., 2006.
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The mineral and agricultural resources of the United States are tremendous. Although the country was virtually self-sufficient in the past, increasing consumption, especially of energy, continues to make it dependent on certain imports. It is, nevertheless, the world's largest producer of both electrical and nuclear energy. It leads all nations in the production of liquid natural gas, aluminum, sulfur, phosphates, and salt. It is also a leading producer of copper, gold, coal, crude oil, nitrogen, iron ore, silver, uranium, lead, zinc, mica, molybdenum, and magnesium. Although its output has declined, the United States is among the world leaders in the production of pig iron and ferroalloys, steel, motor vehicles, and synthetic rubber. Agriculturally, the United States is first in the production of cheese, corn, soybeans, and tobacco. The United States is also one of the largest producers of cattle, hogs, cow's milk, butter, cotton, oats, wheat, barley, and sugar; it is the world's leading exporter of wheat and corn and ranks third in rice exports. In 1995, U.S. fisheries ranked fifth in the world in total production.
Major U.S. exports include motor vehicles, aircraft, food, iron and steel products, electric and electronic equipment, industrial and power-generating machinery, chemicals, and consumer goods. Leading imports include ores and metal scraps, petroleum and petroleum products, machinery, transportation equipment (especially automobiles), and paper and paper products. The major U.S. trading partners are Canada (in the world's largest bilateral trade relationship), Mexico, Japan, the United Kingdom, South Korea, and Germany. The volume of trade has been steadily increasing. The gross domestic product has continued to rise, and in 1998 it was easily the largest in the world at about $8.5 trillion. The development of the economy has been spurred by the growth of a complex network of communications not only by railroad, highways, inland waterways, and air but also by telephone, radio, television, computer (including the Internet), and fax machine. This infrastructure has fostered not only agricultural and manufacturing growth but has also contributed to the leading position the United States holds in world tourism revenues and to the ongoing shift to a service-based economy. In 1996 some 74% of Americans worked in service industries, a proportion matched, among major economic powers, only by Canada.






The government of the United States is that of a federal republic set up by the Constitution of the United States, adopted by the Constitutional Convention of 1787. There is a division of powers between the federal government and the state governments. The federal government consists of three branches: the executive, the legislative, and the judicial. The executive power is vested in the President and, in the event of the President's incapacity, the Vice President. (For a chronological list of all the presidents and vice presidents of the United States, including their terms in office and political parties, see the table entitled Presidents of the United States.) The executive conducts the administrative business of the nation with the aid of a cabinet composed of the Attorney General and the Secretaries of the Departments of State; Treasury; Defense; Interior; Agriculture; Commerce; Labor; Health and Human Services; Education; Housing and Urban Development; Transportation; Energy; and Veterans' Affairs.
The Congress of the United States, the legislative branch, is bicameral and consists of the Senate and the House of Representatives. The judicial branch is formed by the federal courts and headed by the U.S. Supreme Court. The members of the Congress are elected by universal suffrage as are the members of the electoral college, which formally chooses the President and the Vice President.

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