The 1970s and early 1980s saw the onset of stagflation. The United States supported Israel during the Yom Kippur War; in response, the country faced an oil embargo from OPEC nations, sparking the 1973 oil crisis. In 1979, President Jimmy Carter brokered a peace treaty between Egypt and Israel, marking the first time an Arab nation recognized Israeli existence. After his election, President Ronald Reagan responded to economic stagnation with free-market oriented reforms. Following the collapse of détente, he abandoned “containment” and initiated the more aggressive “rollback” strategy towards the Soviet Union. The late 1980s brought a “thaw” in relations with the Soviet Union, and its collapse in 1991 finally ended the Cold War. This brought about unipolarity with the U.S. unchallenged as the world’s dominant superpower.
Contemporary history:
After the Cold War, the conflict in the Middle East triggered a crisis in 1990, when Iraqinvaded and annexed Kuwait, an ally of the United States. Fearing the spread of instability, in August, President George H. W. Bush launched and led the Gulf War against Iraq; waged until January 1991 by coalition forces from 34 nations, it ended in the expulsion of Iraqi forces from Kuwait and restoration of the monarchy.
Government policy designed to promote affordable housing, widespread failures in corporate and regulatory governance, and historically low interest rates set by the Federal Reserve led to the mid-2000s housing bubble, which culminated with the 2008 financial crisis, the nation’s largest economic contraction since the Great Depression. During the crisis, assets owned by Americans lost about a quarter of their value. Barack Obama, the first multiracial president, with African-American ancestrywas elected in 2008 amid the crisis, and subsequently passed stimulus measures and the Dodd–Frank Act in an attempt to mitigate its negative effects and ensure there would not be a repeat of the crisis. In 2010, President Obama led efforts to pass the Affordable Care Act, the most sweeping reform to the nation’s healthcare system in nearly five decades.