9-11 Terrorist Attack and the US Economy - Term Paper Example

Due to the detrimental attack of terrorism which occurred on 9/11 in the World Trade Center in the US, the impacts of terrorism have received increasing attention for review of the literature on the impacts of terrorism. The activities of terrorism not only have direct material impacts on the victims who have been affected by the evil activities of the terrorists but also increase the overall expenditure of the government in restructuring the nation and laying the path of its recovery. Apart from the steps taken by the government in rebuilding the nation, the policymakers and the government have to incur huge expenditures in terms of billions of dollars in redesigning the security framework for the detection of the activities of terrorism.

The country’s expenditure on effective prosecuting the terrorists and putting them behind the bars to punish terrorists goes up rapidly. The political commitments as well as the policies aimed at social welfare and protection of the people of the country against the activities of terrorism lead to a huge outflow of funds for the government. The impacts of terrorism on an economy could be broadly subdivided into primary impacts and secondary impacts (Richardson, Gordon, and Moore, 2007). The primary impacts of terrorism affect mainly three sections of society, namely the household, the private sector and the public sector. A review of past terrorist attacks reveals that households are not much affected in terms of material losses due to terrorism. However, the psychological damage due to the terrorist activities on households is significant as it creates a sense of fear in the society that impacts the economic activities adversely performed by them.

The business houses in the private sector are frequently affected by terrorist activities as its results in the destruction of buildings and properties of the private companies in the economy. The public sector companies are relatively better protected as compared to the private sector in the context of terrorism as the public organizations and their properties are better protected through vigilance and guards against the suspected incidents of terrorism. Despite the security arrangements, the public sector organizations are also affected by the evil intentions and activities of the terrorists as the terrorists find ways to break through the security infrastructure put in place by the government.

The secondary impacts of terrorism explain the impact on the inter-connected economic structure of the country due to the interlinkage between different sectors of the economy of the country. The various sectors of the economy that is impacted by terrorism are the tourism industry, the domestic and foreign direct investments in the economy, the performance of the stock markets, the foreign trade of the nation, and the national income level. Thus the investments and business activities in the economy are hampered as a result of the terrorist attacks.

People tend to move away from visiting the place of terrorist attacks and investors prefer not to invest in the economy that faces terrorism. Cost and harm of terrorism activities to the US economy The cost and harm of the activities of terrorism on the US economy have been explained as follows.