Let’s face it, America and her economy have been ruined government debt is massive, right now America can’t even afford to pay the curators at the
famous museums of Washington. The question on everyone’s lips is “how did we get here?” Now I know that many will disagree with my assessment of
this crisis, people will point to the simple fact of people living beyond their means and lots of bad debt but I personally think the answer to the
aforementioned question is the attacks of 9/11. I believe that 9/11 was not only ground zero for the 2996 people that died but also for the US economy
and in this thread I will set out my reasoning behind this.
The Economic War.
It is interesting to note that country to what some might believe the overall objective of the attacks of 9/11 was not merely a to kill as many
innocent Americans as possible, it was much more than that. Bin Laden believed that the only way to destroy America was to destroy her economy, he
knew that the strength behind America was the dollar sign not the bullet. He astutely recognised that if America was bankrupt it would have no choice
but to bow to his demands, primarily the total withdrawal of American presence in Muslim states and support for Israel. After all if America is
bankrupt how can it maintain its troops in Saudi and how can it continue to support Israel. As such by attacking the financial institutions at the
heart of American economic power on 9/11 he set out not only to kill as many Americans as possible but also destroy her economy.
He once said that:
“We, alongside the mujaheddin, bled Russia for 10 years, until it went bankrupt,”
And went on to say in 2004 that Al-Qa’ida would be:
continuing this policy in bleeding America to the point of bankruptcy
For Bin Laden despite all his ideological and theological motivation and rhetoric he knew that he was not strong enough to defeat America in a head on
conflict, solider against solider. Rather he knew that to defeat America he had to wage war not against America’s troops but its economy, he
measured success not in how many people his martyrs slaughtered but how it affected the markets. Of course his public image and speeches may not have
always displayed this but fundamentally this was his objective.
And I think he succeeded.
9/11: the Immediate Economic effects.
So as stated above, targeting the world trade centre’s was all part of Bin Laden’s grand war against the American economy. So his success it would
seem should be measured not in body bags but in the effect he has had on the American economy.
Firstly let’s look at the immediate effects then of 9/11 on the American economy.
9/11 had a significant impact on the aviation industry with all US airspace closed in the days following the attack the US stalk market remained
closed, within a week of reopening the Dow Jones fell by 14% (A record at the time) and the value of US lost a estimated $1.4 trillion. There was
also a loss of billions to the New York economy which along with the airline industry received billions in Federal government assistance to get over
the economic impact of the attack.
In 2002 a report
to look into the economic impact of the attacks was initially optimistic saying
Among the major conclusions is that 9/11 is more appropriately viewed as a
human tragedy than as an economic calamity
The 9/11 attacks aggravated rather than caused the 2001 American recession which was actually more attributed to the Y2K scare and dot.com bust that
started back in March and the American economy was technically out of recession by the end of the year. Short term really it did seem like 9/11 had
been a blip on the American economy rather than a disastrous blow.
That was because it was the long term effects that would really deliver the sucker punch to the American economy.
9/11: Long Term Economic woes.
9/11 even had an effect on the economic markets that one might think of as a good thing, interest rates were lowered to well below 2% (from 3.5%) and
stayed there for much of 2003. This had happened because the federal reserve felt, quite rightly, that the attacks had undermined the American economy
and that by lowering the interest rates they would be able to maintain some stability in the financial markets and injected $100 billion into inter
bank lending. This however had presented its own problems, it was the low interest rates and the extra money led to financial institutions being able
to offer up attractive low interest adjustable rate mortgages to buyers. The only problem was that as the last decade preceded these interest rates
went to above 5%, the result was the sub-prime mortgage problem we that caused the economic crisis of 2008.
It is true however that there is much more than just 9/11 that contributed to the economic crisis, but very low interest rates (as low as 1%) due to
the attacks in the early part of the decade certainly did not help matters when the bubble burst.
So it is possible to argue that 9/11 at the very least contributed to the economic crisis that would hit America in but the attacks on 9/11 caused
much more profound lasting economic problems for America. Principally the cost in fighting the war on terrorism with the war in Afghanistan and Iraq
(which the government tried to connect to 9/11) then there is the creation of homeland security, the TSA and all the cost of the over hall of
America’s national security in the preceding years along with the “Black budget”. The exact cost of this war vary but it could be as high as
estimated in 2011, so its possible it could be closer now to $7 trillion. When accounting for inflation that’s more than WWII and Vietnam.
That leads us to the problem we have today.....
The above infographic really does speak for itself, on the morning of 9/11 the US debt ceiling was 5.95 trillion, today it is standing at $16.4
trillion, we can say that at least $6 trillion of that could have been saved had the attacks of 9/11 not happened. If Bin Laden (or even if you want
for the sake of argument some other group) did not succeeded in the attacks of 9/11 inflation may not have gone as low as 1% and America would not
have spent $6-7 Trillion on war and national security.
The end result of this has been that now the government cannot afford to pay the curator at the museum because, as I believe, of the attacks of 9/11
12 years ago. 9/11 is a thread that can be pulled at all the way through this mess of a financial situation that America now finds itself in . This
is exactly what happens when a state embarks on a unwinnable war against a enemy it does not understand.
edit on 14-10-2013 by OtherSideOfTheCoin because: (no reason given)