9/11: How The United States Lost Trillions To One Awful Experience

Economic Impact Of 9/11 On The United States.
Following the terror attack which happened in the United States many years ago, multiple trillion of dollars were lost to an event which lasted for a day. The 9/11 attacks had both immediate and long-term detrimental effect on the U.S. economy, some of which thrive till this present day. The U.S. economy experienced the ill-effects of a dread assault. The attacks made the Dow drop almost 700 points and dredged the 2001 recession. Many Wall Street establishments, including the New York Stock Exchange, were evacuated during the attacks. On the first day of trading after the attacks, the market fell 7.1 percent or 684 points. New York City’s economy alone lost 143,000 jobs a month and $2.8 billion in wages in the first three months. The heaviest losses were in finance and air transportation, which accounted for 60 percent of lost jobs. The estimated expense of the World Trade Center damage is $60 billion. The cost to clean the debris at Ground Zero was $750 million.
It likewise prompted the War on Terror, one of the most noticeable reasons for government spending in U.S. history. The breakdown beneath incorporates prompt expenses and physical harms of the attack, just as the financial effect, homeland security, war subsidizing and future war costs.

Complete Expense Of 9/11 Attacks To The U.S.

Al Qaeda spent roughly $400,000 to $500,000 to plan and execute the 9/11 attacks on the World Trade Center and the Pentagon. In 2011, the New York Times estimated in a report that the attacks cost the U.S. $3.3 trillion in the accompanying regions.

9/11 Death Toll

The total loss of life of 2,977 – excluding the 19 hijackers – outperformed that of Pearl Harbor on December 1941. The loss of life included 2,606 individuals at the World Trade Center, 125 at the Pentagon, and 246 on the four planes.

Damage

A 2002 report from the New York Comptrollers Office estimated the cost of 9/11's physical harm at $55 billion. Of that, $24 billion is the expected income of the lives lost. The value of the World Trade buildings alone was $8 billion. Computers, furniture, and autos cost $6 billion. The damage to utilities and the subway system was also $6 billion. Damage to other buildings cost $5 billion. The city spent $5 billion to treat injuries, including those suffered by first responders who inhaled the toxic dust. It spent $1 billion to clean up the area.

Immediate Economic Impact

The stock market closed for four trading days after the attacks, the first time since the Great Depression when President Roosevelt closed the exchanges for two days in March of 1933 to stop a bank run.

The Federal Reserve dropped the fed funds rate half a point to 3.0 percent. The stock market reopened on September 17, 2001. The Dow promptly fell 7.13 percent, closing at 8,920.70. The 617.78-point loss was the Dow's worst one-day drop at that time. Stock prices recovered that loss by October.


Oil prices fell from $23.77 a barrel in August 2001 to $15.95 in December. Although oil prices decline in the fall, this was a sharper decline than usual. Another cause was the dollar's value which rose sharply between August and December. Investors perceive the U.S. dollar as a safe investment during times of crisis. Send oil contracts are priced in dollars, oil exporters can lower oil prices when the dollar strengthens.

The airline industry lost $5 billion from the attacks. The four-day shutdown cost $1.4 billion alone. Passengers were afraid of flying for at least a year. As a result, 1,000 planes were parked during that time, and thousands of workers were furloughed. On September 22, Bush signed into law $15 billion in federal loans.

2001 Recession

The 9/11 attacks worsened the 2001 recession, which had begun in March 2001. The economy had contracted 1.1 percent in the first quarter but bounced up 2.1 percent in the second quarter. The attacks made the economy contract 1.7 percent in the third quarter, extending the recession. Growth returned to 1.1 percent in the fourth quarter. The Y2K scare had initially caused the recession. It created a boom and subsequent bust in internet businesses.

Although the recession ended in November 2001, the threats of war drove the Dow down for another year. It hit bottom on October 9, 2002, when it closed at 7,286.27. That was a 37.8 percent decline from its peak. No one knew for sure if the bull market had resumed until the Dow hit a higher low March 11, 2003, closing at 7,524.06. Unemployment continued to climb until June 2003, when it reached 6 percent. That was the peak for that recession.

War on Terror

On September 20, 2001, President Bush called for a War on Terror. He said, “Americans should not expect one battle but a lengthy campaign, unlike any other we have ever seen.” Then he put it into action.

Bush launched the War in Afghanistan to find and bring to justice Osama bin Laden. He was the head of the al-Qaeda organization that launched the 9/11 attacks. In its first year, Congress appropriated $29.3 billion in emergency funding for the war.

On March 21, 2003, President Bush sent troops into Iraq. He said the Central Intelligence Agency had found weapons of mass destruction. He added that Iraq's leader, Saddam Hussein, was aiding al-Qaeda operatives. Congress appropriated $36.7 billion in emergency funding for the War in Iraq in its first year.

The costs for both wars kept mounting. By the end of Bush's two terms in office, the War on Terror cost $1.164 trillion. That was added to increased spending for the Defense Department and Homeland Security. President Obama spent $807 billion during his two terms. President Trump budgeted $156 billion. That brought the cost of the War on Terror to $2.126 trillion.

Debt Crisis

The most significant economic impact of the 9/11 attacks was how the increased defense spending led to the U.S. debt crisis. Without the War on Terror, the 2018 debt would be $19 trillion or less. That’s $21 trillion total debt, at present, minus $2 trillion. That would be 93 percent of the country’s economic output. The U.S. gross domestic product was $20.4 trillion in 2018. This total is still higher than the 77 percent debt-to-GDP tipping point recommended by the World Bank. But it's much better than the actual 104 percent level.