THE EFFECTS OF 9/11 ATTACKS

The Effects of 9/11 Attacks

The Effect of Sept. 11 Attacks on US Economy

Although, in general, the terrorist attacks on twin towers didn't create large impacts on the economy of United States, the economy of New York faced a large effect both on their public and private sector areas.

"The damage of physical assets is estimated in the national accounts of total $14 billion for private businesses, 1.5 billion dollars for state and local public enterprises and 0.7 billion dollars for the federal government. Rescue and cleanup related cost estimated at $11 billion. Lower Manhattan lost around 30% of its office space and valuation of business disappeared. Around 200,000 jobs have been destroyed or moved from New York, temporarily." (Virgo, 2006)

In general, the United States recovered within 2 years of September 2001 attacks, with growth rates from 1% after the terrorist attacks in 2001 to a rise of 3% by 2003 and 4% in 2004. It's a fact that the attacks of 9/11 have affected badly the psyche of the people of America and others all over the world. (Niemcziek, 2004)

However, as in earlier disastrous events that occurred in American history, the economy of the U.S. continues to demonstrate its resilience after September 2001 incident. (Martell, 2001)

By studying the growth rate of the economy in between the two world wars, it seemed that it was the highest during that period as compared to any other time. Throughout the 1st and 2nd world wars, the production of the United States was the largest, though its war machine was simultaneously improved in view of national security. The economy after war showed more growth in employment, plus increased consumption of private and government sectors, even if it was on the short term basis. During the War of Vietnam, it exhibited the growth above the average level of 3% at present, with growth rates for that war period extending from 3& to 7% in real dollars. (Linley, 2003)

However, the growth seemed to be slowed down as the cold war began to dissolve, as depicted in 1989 dismantling of the wall that separated East and West Berlin and the 1991 fall of the Soviet Union. This does not mean that economic growth is affected by war and terrorism only, but, this approach is used to emphasize the fact that a correlation exists for some extent. Since the dissipation of the costs of the Cold War, the growth rate remains steady in the range of 3% to 4% in real terms. (Kondrasuk, 2004)

In reality, by comparing growth rates between the Clinton and the Bush administrations, economic growth did not change much, except for the period of 2001 and 2002, which was due to the uncertainty of the results of twin towers attacks, as well as the economic downturn that began before the attack.

However, the American economy in 2004 grew by 4% in dollars; the highest growth occurring since 1989. Although, the growth rates were not at higher levels as seen ...