Economic cost of Terrorism or Security Post 911

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Economic Cost of Terrorism
At a time when thwarted plots and terrorist attacks regularly dictate the news headlines and when an obvious item can be the means of a deadly attack, it is evident that the hazard of terrorism hangs on us than has never before. Currently, security search has become far too common in all places whether public or private. It is the issue at the top of national security’s mission in the US and many other countries across the world. Terrorism has of late been regarded as the primary security challenge of the time. Every state is facing a prospective endemic terrorism within their territories. September 11, 2001, was an attack that falls far from a one-off event and whose aftermath has been a series of economic recession and increased cost of living. This is a situation similar to what many other countries whether developed and developing are experiencing after attacks. Apart from killing and injuring people, these attacks have adverse effects on a country’s economy.
The US can argue that the impacts of terrorism are entirely minimal and that the concern is disproportional to the risk that it poses. Comparing the fatalities that have resulted from it to those from conventional battles, road accidents could lead to the claim that terrorism is more than exaggerated. However, it is regarded as the crudest way to face death, and many people fear it. The effects go beyond the death and the destruction that they cause. It impacts on a wider area in that the actual victims are not the only affected, but it leaves greater psychological unrest in the society.

The community’s reaction to a single large attack such as the one on 9/11 is different from their responses to multiple smaller attacks. What matters is the general picture left with the people and nations. This is what affects the economic stability of a country. There are two major forms of terrorism. These are major attacks and minor terrorism activities. The large-scale attacks may happen once in a long time. This involves an apparently planned process and research for it to be effective. In most cases, they occur in forms of the bombing. Minor attacks occur in forms of shooting where the insurgent targets people in public. Nevertheless, both produce negative effects on the society and country at large.
Repeated direct or indirect terrorist attacks create public fear. Fear is one thing that investors avoid. Anyone willing to start business checks at three main things: the stability of the government, the market, and supply. All of them rotate around the government’s ability to safeguard people and their properties. With cases of insecurity, anyone will be cautious to stand in public places which are the primary target scenes by terrorists (Lerner et al. 145). Businesses like supermarkets and large companies are some of the places people converge and hence become target sites. As a result, insecurity promotes low customer turnout and hence reduced the flow of merchandise. The investors are driven away by higher maintenance costs in order to secure their premises and hence relocate to safer places where businesses can pick faster.
With imminent cases of terrorism, the government is forced to invest too much in security measures. This includes training more soldiers, buying ammunitions, securing borders, running monitoring stations and at times engaging the terrorists in a fight. The cost of maintaining troops in Afghanistan was about $850,000per year in 2012 according to the budget (Shaughnessy 2). This has however risen to $1.3 million by 2015. The budgetary impact of the 2001 attack was intertwined with that for the subsequent terrorist bustle and the war in Afghanistan. This made the budget rise to $52.7 billion from $28.8 billion in 2002 indicating an 83% increase. $23.9 billion was allocated to homeland security and $15.2 billion on defense. In the end, the taxpayer was forced to pay more, all which is lost in protecting the country than building infrastructures like better schools, roads, supplying residents with clean water and starting major governmental corporations that could eliminate the rising unemployment rates. In the end, the US recorded a drop in GDP from 4.1% to 1.4% by 2004.
Another direct impact is when the terrorist attack claims lives of people. These could be diplomats, professionals, and breadwinners. Apart from turning a rather stable family into a dependent one, such an eventuality leaves an enormous psychological effect on the society and affected family. Once the people are terrified, they overestimate their chances of being hit and hence become less productive. It demotivates them from working, doing business and even furthering their skills through education. Any country requires professionals and diplomacy for them to be competitive in the global market (Klein 5). Whenever the citizens are not engaging in activities that can result in the two, then the economic growth is bound to lag. Terrorism leads to an increase in xenophobia and ethnocentrism. Support and identification with in-group rises with terrorism while that of out-group decreases. This was apparent in America after the 9/11 attack that resulted in a surge of patriotic sentiments. However, this solidarity comes at a cost for those are not citizens. The citizens mark these individuals hence making them uneasy. Further, other governments may shun from doing business with such a government in fear of drops in quotas.
Terrorism is closely associated with growing risks aversion. Beyond the influence of the spending pattern, families and individuals will likely become more risk-averse when the nation is vulnerable to terrorism. The consumer credit is bound to fall further as people will capitalize more in personal security than in investment. This includes building fences around homes, installing CCTVs, buying cars to avoid public means and securing better schools for their children. Further, they will save more and spend on insurance covers than participate in the stock markets. This brings direct adverse effects on the housing markets and businesses that form the robust sector of the economy. One quarter that is highly hit is the fixed-income markets. The succeeding quest for quality will lead to a substantial flow into the Treasury and mortgage-related securities. This increases costs of services in the directly involved organs such as the airlines, financial institutions, insurance companies and even retailers. The debt obligations and providence of the compound system services may be unable to keep up with the rising Treasury prices hence collapse. These being the major sources of funds for the government will ultimately drive the economy into recession.
In an attempt to inhibit further attacks, the state is forced to revise their strategies and formulate new policies. The federal government has been devoted to ensuring that there shall not have another attack like the 9/11. Since then many policies have been formulated and implemented. The first was the aviation and transportation security act passed immediately after the attack (19 November 2001). The policy required anyone traveling to arrive at the airport hours before the flight so that they could be thoroughly searched. Further, travelers were not allowed to carry any liquids including juices on board. This in itself prevented some people from visiting the state leading to a loss in the aviation and tourism sector. Economic growth was further stroke by the enactment of the Immigration Act a year after the attack. With the increased homeland and border security it became harder to secure a visa for the tourists, foreign nationals, and students. Further, those already in the country were subjected to scrutiny making tourism and business by outsiders a challenge (Poladian 2). Although the policies were meant for the long-term stability of the country impacts on the economy were inevitable. According to Nanto, there was a 1.2% decline in the GDP (1). This led to a long-term dent in the consumer spending and an immediate downturn that has lasted far too long.
Considering the amount the US government has used on military action launched in Afghanistan in pursuit of Bin Laden and the AL Qaeda network, there has been too much instability in the state. America’s economy has not yet stabilized. What seemed as the pursuit of a single terrorist has born more wars with the western countries, the current being ISIS. The budgetary expenditures have risen sporadically making the living standards too high for the ordinary citizen. This is evidence that terrorist attack does not only result in deaths but the larger consequences are economic instability. The government must continue investing in counterterrorism efforts to avoid a recap of the attack that could kill the economy completely.

Works Cited
Klein, Adam. “The Costs Of Terror: The Economic Consequences Of Global Terrorism”. Konrad-Adenauer-Stiftung Facts & Findings 41 (2007): 3-6. Web. 29 Nov. 2016.
Lerner, Jennifer S. et al. “Effects Of Fear And Anger On Perceived Risks Of Terrorism: A National Field Experiment”. Psychological Science 14.2 (2003): 144-150. Web.
Poladian, Charles. “The United States After 9/11: 6 Things That Have Changed Since 2001”. International Business Times. N.p., 2016. Web. 29 Nov. 2016.
Shaughnessy, Larry. “One Soldier, One Year: $850,000 And Rising”. Security.blogs.cnn.com. N.p., 2016. Web. 29 Nov. 2016.
Nanto, Dick K. 9/11 Terrorism: Global Economic Costs. CRS, 2004. Web. 29 Nov. 2016. CRS Report For Congress.