The year 2089 is considered the year of the 'Great Western Collapse', when the United States of America's economy collapsed. Considered much worse than the stock market collapse of 1929, it was the start of the eventual dissolution of most counties and the founding of the People's Republic of Terra.
Much speculation has gone into wondering why the United State's economy collapsed. The economic turmoil of the twenty first century is generally blamed, but the truth is the overall cause (if there is one) isn't known.
Immediately following the collapse, World War III was declared. This war ended with the United States being dissolved and the People's Republic of Terra being established. It would also serve as the basis for the ongoing war between the People's Republic of Terra and The League of Allied Worlds.