Rodney Brandenburg III
Mr. Reuter - B2
Econ
23 March 2016
Terrorists Break Down the Economy
As we all have seen in our lifetimes, there are groups of horrible people who try to destroy countries with violence at a completely new level. Here in the United States we have only directly felt the wave of one major event: The 9/11 attack on the World Trade Center. The immediate effect was the wave of fear sweeping over the nation and the economy was thrown down the drain. Demand had decreased severely for the airline industry, and New York was thrown into a state of chaos for a few days. The entire goal of the attack was to cripple our economy, and it nearly succeeded. We were forced to close the stock market for four trading days, which are essentially the same as business days (Monday thru Friday), in order to collect ourselves and ‘control’ the situation. Once the stock market opened up on September 17th, the DOW dropped 7.13% which remains the largest one day drop ever.
Overall, the 9/11 attack worsened the already painful 2001 recession that had started earlier that year. The attack caused the economy to contract 1.1%, which added to the debt and extended the recession. The long term effects don’t come directly from the attacks, but from the response from President Bush. The War on Terror added over $1.8 trillion dollars to the total debt of the country, which would eventually lead to the 2011 debt crisis. The debt crisis was caused by the ‘tea party republicans’ refusing to raise the Debt Ceiling, this was to attempt to prevent the national debt from rising any higher. However, in 2013, the government was forced to shut down for 16 days, due to the same reason. Even today, the 9/11 attacks are affecting the economy which shows that the terrorist group's plans had succeeded.
Attacks in France
After the major terrorist group, Al Qaeda, was destroyed we thought we had nearly won the War on Terror. We were right for a few years however, in November of 2015 a new threat emerged when bombs were detonated in Paris, France. These bombings occurred in an extremely public area and were completely uncalled for. Following the attack, reports say that the damage caused will cost upwards of €2 billion, which may only be a 0.1% decrease in the GDP of €2 trillion but for a country that hasn’t been able to have much economic growth, this decrease could be detrimental. The major source of harm to the economy may not be the attack itself, but the effects on tourism and retail trade.
The public attack would definitely cause people to rethink their trip out to France, but it would also deter the people who are already there causing them to shorten their trip and not buy the things they might have before. The decrease in tourism would effectively decrease the demand for things like ‘I Heart Paris’ shirts and all of the other kinds of souvenirs. The leads to a surplus of these items which would definitely hurt the economy, especially since France is a popular place for people to visit. In addition to the actual goods that are sold, the country will also miss out on much of its hotel and airline income since less people are going to visit. In the end, France will be able to recover from such an attack, but not before losing much of its revenue from the popular tourist locations and goods.
Attack in Belgium
Much like the events that occurred in Paris, the bombings in Belgium will definitely harm the tourism. However, Belgium is known for it’s huge spike in tourism during the Easter season. Many people chose to visit the many churches and places of worship in Belgium and with this attack people will be less likely to go. Much of Belgium's popular items like it’s chocolate will now be in a Surplus since they would produce more due to the large amount of people coming in. Since the attacks in Belgium are so recent there isn’t much to say about the long term effects, but it would most likely appear similar to the long term effects of Paris, since they both rely heavily on their tourism industry to add to their economy. Many people go straight to the physical damage caused by the terrorist attacks in countries, but the buildings, streets, and metros can be repaired. The lives are forever lost and the country remains forever changed. The economy is another thing that can be heavily altered by these events, which could lead to even an even more difficult time for the families that lost mothers, fathers, brothers, and sisters. Overall, Terrorism affects the entire country, people, governments, and the economies as well, and in the end, some of these things will never be able to return to ‘normal’.
I feel like terrorists don't realise that after they attack, it affects the country's economy. Even today we are still recovering from 9/11, which is crazy because it happened 15 years ago. It doesn’t just affect the people, it does way more than that. I agree with you that all terrorism should stop, because it is ruining more things and still hurting people years after.
ReplyDeleteColin Marks
DeleteI think the sole purpose, aside from instilling fear in targets, is to have a negative economic impact on the country they are attacking. Why do you think they went for the world trade center? Aside From that, it is ignorant for the author of this post to say America has only felt the "wave" once when there have been many other terrorist attacks happen every year in the United States.
I agree with Colin. The purpose of terrorist attacks is to inflict as much damage possible. An attack on a group of people is a horrible thing. But it only effects that group of people, not the nation. However if they attack an economy they are attacking the whole nation.
DeleteColin Marks
DeleteI think the sole purpose, aside from instilling fear in targets, is to have a negative economic impact on the country they are attacking. Why do you think they went for the world trade center? Aside From that, it is ignorant for the author of this post to say America has only felt the "wave" once when there have been many other terrorist attacks happen every year in the United States.
This is an interesting topic; I had never thought about how terrorism might effect the economy. Throughout the paper there were a lot of good statistics stated and multiple examples to prove just how bad terrorism is for the economy. The terrorist also don't realize that even after 15 year the economy is still trying to recover fully from 9/11.
ReplyDeleteI could always picture major wars having a huge impact on the economy of a place, I never really thought about one single attack. What you said about the tourism was extremely interesting to me because I've learned that something like the Superbowl or the Olympics can have a major impact on a country but Paris is already so big they have tourism all year round. I feel like the hard part about it is how does Pairs now convince people their country is safe for tourists to start visiting again.
ReplyDeleteI do agree that terrorism ends up hurting the economy in the long run, and I hadn't thought before about the ways the recent attacks in France and Belgium would effect the economy due to a loss in tourism. It's horrible that people would want to do such a thing to others, and the effect overall is massive. It damages every aspect of a country: political, economical, emotional, etc.
ReplyDeleteExtremism has existed since the 1st/11th century, and will probably continue for longer than any of us will be alive. Fighting terrorism is part of the reason why people feel motivated to join and fight for the extremists. Many feel like they're homes are being invaded and there streets filled with foreigners, and they believe that is the best way to combat it. There's going to be cases of course where these terrorist groups don't have any real reason to attack innocent people, but they gain mass amounts of support from either being forced to or thinking what they are doing is right. By invading these countries and fighting against them we draw more heat from them, and without being prepared we only hurt ourselves. We often don't try and look at it from there point of view, where they live under an oppressive government in severe poverty. Assisting instead of hurting would really help these countries and extremists from getting to the places that they are now. Even if it's going to be prevalent regardless of what we do, the least we can do is try to reduce it from it's source and prepare ourselves for the future.
ReplyDeleteI do agree with this that terrorism does destroy a countries economy. With 9/11, the tourism factor like you said is extreme influential due to the fact that it brings in money to the places that are great tourist attractions like what the World Trade Center used to be. After the attacks and destroying both of the buildings, money isn't coming in from the lack of tourism in that certain area so they won't get as much money to rebuild which now is One World Trade.
ReplyDeleteI do agree that Terrorist attacks hurt economy's for short and long term but in some cases does it almost help for our future? By failures that have happened in the past we have grown to protect our future. Such as when 9/11 happened (not saying this is a good situation at all) but we learned to increase homeland security which I'm sure many other countries did as well. There have been no major attacks that have happened since 9/11 in the USA which is a great thing. Yes there have been minor ones, but how do you stop them completely?
ReplyDelete-Carson Cotterell
Define minor
DeleteYou increase defense spending and address terrorism as the true threat it is. This means less stringent laws of engagement and serious action by the commander in chief.
DeleteThis comment has been removed by the author.
DeleteBuild a wall
DeleteYou make interesting points in your article about the drastic decrease in the economy's stock market and size due to the specific attacks. However, the drops in the market would have come naturally, anyways. The attacks only affected the short-run, moving SRAS but not LRAS. Because the economy is a continuous cycle of peaks and troughs, it's interesting to see what events can spark a positive or negative reaction. I agree with you that the terrorist attacks resulted in a negative reaction. Great job on your article!
ReplyDeleteUnfortunately 9/11 took place at a very low point in our economy as a whole. So, the horrendous aftermath of the Worlds Trade Center falling created plenty more expenses for our country, just adding to the already growing debt. But the large decrease in our economy was already bound to happen because it's a constant fluctuation. But these "fluctuations" could be seen as either negative or positive reactions, the attacks clearly being negative. But as for the long term reaction of the attacks we've come a long way as a country. Making plenty of positive improvements in homeland security. It improved other countries homeland security after seeing us affected so negatively. It's made everyone consider the safety of our country more. I wouldn't necessarily say that terrorism has benefited our country directly but it has made us much more aware of our surroundings.
ReplyDeleteAn interesting take on a topic that we normally only perceive through emotions. I can say that I’ve never thought about how this could affect anything other than the people physically involved and their families. The statistics about the 9/11 attack I found particularly interesting, especially when compared to the national debt.
ReplyDeleteThis is a topic that I haven't truly thought about until reading this. It is interesting to see (and now know) that the terrorist attack could do such damage to an economy. But I do think that some these financial downfalls would have happened sooner or later, though not as dramatic as they did happen. Your articel makes me think "What are we going to do if the terrorists next attack is planned?" What I mean by that is, with technology make us so vulnerable and what if terrorist know what our financial circumstances are, and do a specific attack that might ruin our and many other countries economy? Scary. But I do agree with your piece, terrorism is able and has been affecting economies, short term, heavily and might continue to decrease because of them.
ReplyDeleteI haven't really considered how economies can be affected after terrorists attacks. The thought of most countries having to live in constant fear of an attack or even uncomfortably is sad. People are doing completely immoral things and although they achieve their goals, they do much more than that. If a country isn't well put together, then a terrorist attack could completely ruin that country for good if they can't get back on their feet fast enough.
ReplyDeleteTo me I never realized how much terrorists could affect the economy but you did an excellent job of bringing it to light. In addition you really put emphasis on your points by using different examples rather than just one attack. I think you could've added a bit more with some of the long term affects and possibly predictions for the future with what might change. Overall you did an amazing job of relating economics to something that isn't typically related.
ReplyDeleteI agree that the economy is strained in some aspects do to terrorism, but the government’s expenditures can often help the economy recover faster. Like you mentioned, countries such as Belgium rely heavily on tourism to make up a majority of their small business revenue. Now the airport in Brussels was recently reopened to the public for commercial flights, however there was more police presence and added security that checked bags before people got in the building, a costly measure that will help people travelling throughout the airport feel safer.
ReplyDeleteI hope everyone has realized that terrorism can happen anywhere at anytime. These maniacs will stop at nothing to cripple those they feel are a threat. My question is why has President Obama cut back so much on the defense budget? Since 9/11, homeland security and military funding should be a top priority. Perhaps that is why so many generals have retired early, because they could not stand to see what is happening to our military.
ReplyDeleteIf anyone believes they are safe from terrorism here in the Midwest, they are niave. It can happen anywhere!