Why was the American economy prosperous under Clinton?

[CroSpartacus]

What was it about Bill Clinton that caused the prosperity of the 1990's? I keep hearing everyone claim that Obama could make this country prosperous like the Clinton times, but I want to understand was Clinton the reason why the American economy was doing well in the 90's?

This is my hypothesis:

Clinton was more of a moderate than a liberal and did not enact radical legislation. The 90's were also a time when the internet-boom appeared and the computer revolution took off. Clinton did not have a major war like Iraq to deal with. Perhaps the natural "boom-and-bust" cycle was in its boom stage during Clinton's presidency and then entered its bust under Bush?

I was only a kid in the 90's, but I do remember that life felt much better.

[Mike Mitrosky]

He happened to be president when the monetary bubble was on the rise.

[CaptUSA]

He happened to be president when the monetary bubble was on the rise.

Yeah, and the rise of the internet. It opened a whole new market that had never been tapped. Wealth increases when people trade - the internet made that more efficient and many people started to take advantage.

Clinton was the luckiest SOB to ever hold the office.

[TonySutton]

Do not think Clinton did not have a liberal agenda. He had Hillary heading up a Health Care reform task force in 1993. One of the things that made Clinton look better was a Republican congress that was fighting him every step of the way starting in 1994.

[thoughtomator]

1) credit bubble
2) some semblance of actual fiscal discipline

[Steven Douglas]

Yep, the dotcom bubble and the real estate bubble began in 1997, during Clinton's second term. The dotcom bubble crashed at the end of his watch, just as the housing bubble was ramping up. Fuel for the housing bubble started a year before Clinton started his first term.

Can anyone say Fannie, Freddie and ACORN?

All agree that the bursting of the housing bubble caused the financial collapse of 2008. Most agree that the housing bubble started in 1997. Less well understood is that this bubble was the result of government policies that lowered mortgage-lending standards to increase home ownership. One of the key players was the controversial liberal advocacy group, Acorn (Association of Community Organizations for Reform Now).

The watershed moment was the 1992 Federal Housing Enterprises Financial Safety and Soundness Act, also known as the GSE Act. To comply with that law's "affordable housing" requirements, Fannie Mae and Freddie Mac would acquire more than $6 trillion of single-family loans over the next 16 years.

Congress's goal was to force these two government-sponsored enterprises (GSEs) to purchase loans that had been originated by banks—loans that were made under the pressure of another federal law, the 1977 Community Reinvestment Act (CRA), to increase lending in low- and moderate-income communities.

From 1977 to 1991, $9 billion in local CRA lending commitments had been announced. CRA lending by large banks increased dramatically after the affordable housing mandate was in place in 1993, growing to $6 trillion today. As Ellen Seidman, director of the federal Office of Thrift Supervision, said in a speech before the Greenlining Institute on Oct. 2, 2001, "Our record home ownership rate [increasing from 64.2% in 1994 to 68% in 2001], I'm convinced, would not have been reached without CRA and its close relative, the Fannie/Freddie requirements."

The 1992 GSE Act was the fuse, and the trillions of dollars in subsequent CRA and GSE affordable-housing loans would fuel the greatest housing bubble our nation has ever seen. But who lit the fuse?

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[Mike Mitrosky]

1) credit bubble
2) some semblance of actual fiscal discipline

Yeah lets not discount #2... Clinton got the deficit to its lowest.. like $17 billion one year... the democrats claim there was a budget surplus but you cant have a surplus and increase debt every year .. so we know there was no surplus

[Brian4Liberty]

Yeah, and the rise of the internet. It opened a whole new market that had never been tapped. Wealth increases when people trade - the internet made that more efficient and many people started to take advantage.

Clinton was the luckiest SOB to ever hold the office.

Yep, pure luck to be sitting there during a revolution in technology and trade. And corresponding economic activities and investment caused unemployment to plummet. If you wanted a job, you could get one.

[thoughtomator]

Yeah lets not discount #2... Clinton got the deficit to its lowest.. like $17 billion one year... the democrats claim there was a budget surplus but you cant have a surplus and increase debt every year .. so we know there was no surplus

The claim of surplus is a lie based on stealing Social Security funds and using a calendar year instead of a fiscal year. But there's no denying that the deficit got very close to zero even still, during the Clinton years.

[Jordan]

For the same reason it'll be prosperous under Obama's second term: credit expansion. We had the 1991-93 housing bust, then credit boom and conumption-driven growth fueled Clinton's economy. 2012 is 1993, get ready!