The tech craze: People were throwing money at dot-com stocks, which generated massive capital gains taxes that nobody in Washington budgeted for. When the music stopped, the money vanished.
The demographic wave: The baby boomers were right in their peak earning years, pumping cash into income and payroll taxes while they were still too young to draw heavy on Medicare or Social Security.
Military cutbacks: The Cold War ended, so defense spending dropped naturally. It wasn’t some genius master plan; the global threat just changed.
The tax hike and spending caps: Clinton raised taxes on high earners in ’93, and Gingrich’s Congress forced some actual spending limits. That helped put a floor under the deficit, even if it didn’t create the whole surplus by itself.
Clinton delivers first US budget surplus in 29 years in 1998
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