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Clinton, to whatever extent a president matters, welcomed China into the WTO, inaugurated NAFTA, repealed Glass Steagall and other New Deal bank laws that would have protected, to some extent, against the GFC. In other words, he rode the highest point of the Cold War victory wave and set us up to crash down hard.

Here is the a more nuanced understanding of this event and why it is mathematically impossible for it to happen again, Policy choices in office generally lag real effects and many structural benefits made this the most prosperous period in US history (such as high labor force participation, the DOT COM bubble, reduction in the Federal workforce, low debt, outsized tax revenue). Budget allocation did play functional role here (Like defense spending at 3% GDP) however so I won't discount that completely.
**President Bill Clinton achieved federal budget surpluses from 1998 to 2001** through a combination of **tax increases on high earners**, **spending restraint** (particularly in defense), and **unusually strong economic growth** driven by the late-1990s tech boom.  The **Omnibus Budget Reconciliation Act of 1993** raised the top income tax rate to 39.6% and increased corporate taxes, while the **Balanced Budget Act of 1997** imposed bipartisan spending caps and reduced Medicare growth rates.  Defense spending dropped significantly from 4.3% of GDP in 1993 to 2.9% by 2000 due to the post-Cold War "peace dividend," and the federal workforce was reduced by approximately 377,000 positions. 
Key factors contributing to the surplus included:
* **Revenue Growth**: Strong GDP growth (around 4% annually) and the tech boom sharply increased tax receipts, accounting for roughly three-quarters of the fiscal improvement according to CBO decompositions. 
* **Fiscal Discipline**: The administration eliminated over 250,000 federal jobs and consolidated agencies through the "Reinventing Government" initiative. 
* **Bipartisan Negotiation**: Conflict and subsequent deals with Speaker Newt Gingrich led to government shutdowns in 1995 but eventually resulted in agreed-upon spending constraints. 
* **Social Security Surpluses**: Headline surplus figures included significant surpluses from Social Security payroll taxes, which were earmarked for debt reduction rather than general spending. 

The Role of the Dot-Com Bubble and One-Time Gains

The **Dot-Com bubble** created a temporary, unsustainable surge in asset values that inflated tax receipts far beyond standard projections. 
* **Capital Gains Windfall**: The stock market boom generated hundreds of billions in **capital gains taxes** that were not accounted for in 1996 baseline projections.  The CBO noted that revenue reached **20.6% of GDP in 2000**, significantly higher than the **18.6%** projected just four years earlier, solely due to faster-than-expected growth and bubble-driven gains. 
* **Illusory Surplus**: Critics argue the surplus was largely an accounting artifact of this bubble. When the bubble burst in 2000-2001, these one-time revenues evaporated almost immediately, turning the projected long-term surpluses into deficits even before major tax cuts or wars began. 
* **Social Security Masking**: The headline surplus figures included substantial surpluses from **Social Security payroll taxes**, driven by high employment during the boom.  These funds were used to purchase government securities, effectively allowing the government to spend the surplus while claiming debt reduction. 
# Demographic Tailwinds: The Boomer Workforce Peak
The 1990s represented a demographic "sweet spot" that artificially boosted the budget balance.
* **Peak Labor Participation**: The **Baby Boomer** generation was in its prime earning and spending years, leading to a high ratio of workers to retirees.  This maximized income tax and payroll tax collections while minimizing pressure on entitlement spending like Social Security and Medicare.
* **Temporary Relief**: This demographic dividend was temporary. As Boomers began retiring in large numbers post-2010, the worker-to-beneficiary ratio dropped sharply, removing this structural support from the budget and contributing to long-term fiscal strain. 
# Long-Term Costs: Outsourcing and Trade Deficits
While the budget showed a short-term surplus, the administration's trade policies—specifically **NAFTA** (1993) and **Permanent Normal Trade Relations (PNTR) with China** (2000)—created significant long-term economic costs that arguably offset fiscal gains. 
* **Job Displacement**: The **Economic Policy Institute** estimates that trade deals facilitated by the Clinton administration resulted in a net loss of nearly **3.4 million jobs** (700,000 from NAFTA and 2.7 million from the China trade deal).  These were predominantly high-wage manufacturing jobs.
* **Structural Deficits**: The opening of markets led to chronic trade deficits, particularly with China, which grew from **$83 billion in 2001** to over **$340 billion by 2014**.  This transfer of manufacturing capacity contributed to wage stagnation and reduced the domestic tax base in subsequent decades.
* **Tech Transfer**: The push for globalization and China's entry into the **World Trade Organization (WTO)** facilitated significant technology transfers, enhancing foreign competitors' capabilities and eroding the U.S. technological monopoly that had fueled the 90s boom. 

And I thought I was the only one who knew this. The WTO published economic and other info annually about each country. We have not been #1 in a while.
I remember 2017 being at my internship in Croatia. My counterparts were slap drunk at the border of Slovenia chanting loudly “USA…USA…” all the way to the border and when we got there they kept going over the border patrolman’s instructions. He said “if you can’t listen I’ll keep you here at the border and you can tell your president to come get you.” They calmed right the hell down and we got through. It was the belief that America was #1 (again somehow with the change in leadership…their words not mine) that made them behave that way. Glad the border patrolman got them squared away.
No lies were told in that soliloquy.