The Economic Attack of Security
War is not a cheap man’s game. At the core of every nation sits an economy comprised of varying wealth and resources. A nation’s prosperity is dependent on its economic fortitude. In a constant state of fluctuation, economic prosperity is often fleeting, with a single event capable of causing economic turmoil for decades to come. The terrorist attacks of September 11, 2001 acted as a catalyst for economic change in the United States. The attacks resulted in local economic turmoil; however, long-term response to the attacks provides the greatest economic impact for the United States and the world.
The attacks of 9/11 resulted in history’s longest stock market shut down since the 1930s. The New York Stock Exchange remained closed for six days after the attacks. Davis (2011) reports that upon reopening, the New York Stock Exchange fell almost seven hundred points, the biggest one day loss in history. ...view middle of the document...
The immediate financial repercussions of the terrorist attacks were astronomical. Makinen (2002) reports airlines received a $15 billion federal aid package. Insurance made history paying over $40 billion in property and casualty claims. New York City alone lost over $27 billion following the first three months post attack. In 2002, New York City lost $2 billion and another $1 billion in 2003. Furthermore, the 9/11 terrorist attacks destroyed or disrupted 18,000 businesses, resulting in over four hundred mass layoffs. The government, by the summer of 2002, sent $21 billion in aid to New York City for debris cleanup, economic development, and infrastructure projects. In an already weakened economy, such dollar loss led many to believe 9/11 caused the recession.
The attacks of 9/11 had a limited direct economic effect. Makinen (2002) reports the fourth quarter of 2001 experienced economic growth, just months after the attacks. While the government’s grounding of planes did hinder the distribution of currency and trade with Canada and Mexico, these impediments were short lived. Canada and the U.S. worked to expedite cross board trading for important commodities. Furthermore, other modes of transportation, including bus and train, offset economic losses due to people avoiding air travel. In fact, Makienen (2002) further argues that less air travel resulted in lower oil prices, after the initial oil price spikes. Nevertheless, the economic impact on New York City was astounding, and the terrorist attacks greatly affected the United States and world’s economy.
The notion of security consumed the United States post 9/11. In June 2002, President George W. Bush proposed the creation of the Department of Homeland Security, a combination of 22 agencies tasked with protecting the homeland. Bush further expressed his commitment to protecting the homeland with the Budge for 2003. The Budget allocated $37.7 billion to homeland security (Pres Budget), an $18 billion increase from 2002. Additionally, this budget focused only on four main policy initiatives, not addressing everything on the homeland security agenda (pres budget).