How the 9/11 Attacks Still Affect the Economy Today Question: How the 9/11 Attacks Still

Affect the Economy Today Answer: The 9/11 attacks had both immediate and long-term economic impacts, some of which continue to this day. The attacks caused the Dow to drop more than 600 points, the 2001 recession to deepen, and led to one of the biggest government spending programs in U.S. history -- the War on Terror. 9/11 Attack Facts On the morning of September 11th, terrorists hijacked four planes at Boston's Lo gan airport. Their goal was to cripple the U.S. economy by destroying its center s of power: Wall Street, the Pentagon and the White House. The first two planes successfully hit their targets: American Airlines Flight 11 crashed into Tower O ne of the World Trade Center at 8:46 am, and United Airlines Flight 175 crashed into Tower Two at 9:03 am. By 10:05 am, millions of television viewers saw Tower Two collapse, and Tower One follow it at 10:28 am. Tower 7 collapsed at 5:20 pm . Meanwhile, American Airlines Flight 77 crashed into the Pentagon at 9:37 AM. The building collapsed at 10:10 am. The terrorists planned to fly United Airlines Flight 93 into a key U.S. target l ike the Capitol building or White House. At 9:23 am, after the World Trade Tower crashed, dispatcher Ed Ballinger texted all flights he was following, including Flight 93, "Beware any cockpit intrusion two a/c hit World Trade Center." Five minutes later, the terrorists killed the pilots and took control of the plan. By that time, at least 10 of the passengers had talked to loved ones via cell phon e, and knew of the World Trade Tower attacks and their probable fate. At 9:57, t he brave passengers attacked the terrorists. Flight 93 crashed into the fields o f Pennsylvania at 10:03 am, killing all 30 people aboard. 9/11 Death Toll Nearly 2,600 people died at the World Trade Center, 125 died at the Pentagon and 256 died on the four planes. The total death toll of 2,975 surpassed that at Pe arl Harbor in December 1941. (Source: 9/11 Commission Report; CBS News, "Officia l 9/11 Death Toll Climbs by One," September 10, 2009) 2001 Recession The stock market closed for four trading days after the attacks, the first time since the Great Depression. (In March 1933, President Roosevelt closed the marke ts for two days, as part of a bank holiday to prevent a run on the banks.) The s tock market reopened on September 17, 2001. The Dow promptly fell 7.13%, closing at 8,920.70. The 617.78 point loss was the Dow's worst one-day drop ever. The 9/11 attacks aggravated the 2001 recession, which started in March 2001. The economy had contracted 1.3% in the first quarter, but had bounced up 2.7% in th e second quarter. The attacks made the economy contract 1.1% in the third quarte r, extending the recession. The 2001 recession was caused by the Y2K scare, whic h created a boom and subsequent bust in internet businesses. Although the recession was officially over by November 2001, threats of war drov e the Dow down for another year, until October 9, 2002, when it closed at 7,286. 27, a 37.8% decline from its peak. No one knew for sure if the bull market had b egun until the Dow hit a higher low on March 11, 2003, closing at 7,524.06. Unem ployment continued to climb until June 2003, when it reached 6% -- the peak for that recession. War on Terror On September 20, President Bush called for the War on Terror. In his speech, he said Americans should not expect one battle but a lengthy campaign, unlike any ot

her we have ever seen. Then he put it into action. Bush launched the War in Afghanistan to find and bring to justice Osama bin Lade n, the head of the al-Quada organization that master-minded the 9/11 attacks. Th e Afghan War did not cost much initially - $20 billion, plus $13 billion to launc h Homeland Security. However, on March 21, 2003, President Bush sent troops into Iraq. He said the CIA had found weapons of mass destruction, and that Iraq's le ader, Saddam Hussein, was aiding Al Qaeda operatives. In its first year, the War in Iraq cost twice as much as the one in Afghanistan -- $50 billion compared to $30 billion for FY 2003. And the costs kept mounting. By the end of Bush's term in office, the War on Terror cost $864.82 billion. This was in addition to incr eased Defense Department and Homeland Security spending. President Obama increased spending for the War on Terror, although he didn't cal l it that. In just three years he requested $477 billion - more than half the act ual Bush "War on Terror" initiative that lasted eight years. The total War on Te rror costs have been more than $1.3 trillion. This doesn't count all defense and security spending, which was $851 billion for FY 2013 alone. Debt Crisis Perhaps the biggest economic impact of the 9/11 attacks was inflated defense and security spending. This created the debt crisis in 2011, where Congressional Re publicans called for severely limiting Medicare expenditures, thereby cutting be nefits. It also led to the first-ever downgrade of U.S. debt by Standard and Poo r's. This national debt will reach $16 trillion in 2012. This means the debt-toGDP ratio is more than 100%. The debt crisis means there is less funding availab le to fund stimulus programs, and reduce the high unemployment left over from th e 2008 financial crisis. Article updated September 4, 2012