Edited: For educational purposes.
Saddam Hussien never thought he could fight a US led coalition.
Thanks to Wikileaks, we now know that the United States clearly told Saddam just prior to the invasion that they were indifferent to it and wouldn't get involved. AKA the United States gave the invasion a greenlight to go.
Edit:
Getting a surprising amount of pushback on this. The disagreement isn't a shock but it's rather humourous so many people are arguing against what the government itself has expressly admitted.
For specifics, amidst Iraqi claims that the US approved of the invasion, the US ambassador to Iraq was called to testify in front of congress in 1991 to explain why she gave a greenlight to invade. She readily admitted that she had indeed said those things to Saddam but excused it under stating “I never thought he'd be stupid enough to actually invade Kuwait.” She made it seem like it was an offhand remark over what appeared to her to be nothing more than a minor economic dispute and then Saddam irrationally thought her offhand comment over an economic dispute meant he could invade.
Despite that the transcript of her actual conversation with Saddam existed, it remained sealed from the public. The general narrative was that Saddam was an irrational fool so him misinterpreting our indifference over an economic disagreement as an ok to invade seemed plausible to the general public and the issue went away.
Then in 2011, Wikileaks released the actual transcript. In it they endlessly discuss nothing but an invasion from troops being mobilized to the failure of negotiations etc etc. This made clear that there wasn't the previously stated ambiguity of the statement the US wouldn't care and wouldn't get involved. They were talking specifically about the invasion. Saddam even expressly promises not to invade until the upcoming talks with Kuwait are settled as he's giving negotiations one last shot.
If you're going to continue to challenge this in the comments, please provide actual sources. Everything I've stated is easily fact checked in both original documents and countless media reports on the issue.
End edit.
The Iraqi-Kuwaiti conflict is also far more nuanced than we commonly report as well. While we mention “he invaded a smaller country" we then fail to disclose that Kuwait had not only been the instigator but that many other countries would have acted sooner given similar conditions. The two countries had basically been at economic war for some time and this was a natural escalation, not a sudden and greed driven assault.
For background, during the Iran-Iraq war, Iraq went into deep debt to pay for the war. Afterwards, they sought to pay it off via oil.
So Iraq was asking OPEC to lower production quotas to raise prices while Kuwait was appealing OPEC to increase production and lower prices. On its own just an annoyance but there's more to it. Even with appeals for more production, Kuwait was still producing about 50% more than their OPEC quota allowed. This helped keep oil prices lower and reduced Iraq's ability to pay off their debt.
Then you had the fact that during this time Kuwait was slant drilling into Iraqi oil fields to steal billions of dollars worth of their oil. You may recall that it inspired a Simpsons episode with Mr. Burns as the slant driller. That's a classic episode and I highly suggest you watch it if you haven't.
Making matters worse, a lot of the debt Iraq owed was to Kuwait. This was a particularly awkward arrangement since Iran had regularly attacked both Kuwaiti territory and their tankers and was protected by Iraq. Iraq felt very betrayed that despite that they'd helped Kuwait survive, not only would Kuwait not forgive or negotiate some of the debt but they were undermining them in setting lower prices as well as outright stealing from them.
Iraq exhausted all options trying to negotiate with Kuwait but they wouldn't budge. Backed into a corner, Iraq saw no other options and after obtaining US permission, proceeded with the invasion.
You don't ask a third party country (who is already an ally of yours) for permission to invade another country if you aren't extremely fearful of what that country may do if they got upset.
While Iraq had a massive army that was very impressive on paper, it simply was no match for the United States air power. This is what happened as they retreated from secure bases in Kuwait through the open desert.
It's called the highway of death.
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