While some states agreed with the approach decided by President at the time George Bush, other states would have opted for a more peaceful approach. Otherwise put, the seed of these international political conflicts was represented by the War on Terrorism, or the violent response of the Bush Administration to the terrorist attacks on September 11. The national opinions were also diverse, with some groups voicing their concern that the WOT was merely a pretense to invade the rich-in-oil Afghanistan and Iraq (Shah, 2007), whilst others sought refuge, peace, security or even revenge in the endeavor. Regardless of the stand taken by each individual, fact remains that the War on Terror has generated numerous effects upon the national economy.
Gary North (2006) is rather cynical relative to the War on Terror and argues that it is being led by the same organization which ran the unsuccessful war on drugs -- the results are expected to be similar. Placing aside this personal opinion and trying to remain objective, North argues that the WOT could easily materialize in a long-term increase in the trade prices of several commodities, such as crude oil, natural gas, aluminum, steel or silver. Price increases in these commodities are already obvious but the War on Terrorism could easily contribute to a maintenance of this ascendant trend.
Then, another direct result of the WOT upon the American economy could materialize in an increase in the demand for military products and services. As it has been previously mentioned, the focus of the United States authorities could be switched from production to national security, meaning that more resources are allocated to the military and that demand for these types of products continues to grow. On the long run, this will translate into increased revenues for the military products manufacturers and service deliverers. Additionally, the stock prices of these organizations' shares could increase (North). In a nutshell, the economic power of the companies in the military sector could augment in the years to come.
Matthew O'Rourke (2005) looks at the economic effects of the War on Terror from a more military angle. As such, he identifies two direct impacts, materialized in the following:
"An increase in overall military assistance to countries experiencing conflict
The elimination of sanctions on arms exports to these countries" (O'Rourke).
These two effects lead to the conclusion forwarded by North, in the meaning that the power of the American military sector is expected to increase in the long run. Additionally however, these endeavors have been made mostly from federal budgets, meaning that the governmental spending in fighting international terrorism place a growing pressure onto the national system. Money has to be taken from the budgets of education, social services or healthcare and relocated to the military and national defense. This then means that the quality of delivering these services will dramatically decrease in both short and long terms, to culminate with reduced living standards and a decreased quality of life for the American citizens.
To better understand the economic costs of the War on Terror, one should take a glimpse at the following numbers:
According to the U.S. National Debt Clock Website, the U.S. federal debt of today (April 23, 2009) amounts to a staggering $11 trillion, accounting for nearly 80% of the gross domestic product registered for 2008 (Central Intelligence Agency, 2009)
The total cost of the War on Terrorism commenced in 2001 is of $849 billion, much more than the war in Vietnam
$662 billion is the cost of the war in Iraq and $186 billion represents the cost of the war in Afghanistan (Cost of War)
The tragic events of September 11, 2001 can be described in a series of manners, such as the most vicious attacks against the Americans on their soil, ruthless murders of innocent people and so on. But an analysis of the attacks from a more detached angle will reveal numerous economic effects, alongside with the already heavily debated political and social impacts. In terms of economic stability, this has been most dramatically affected in the city of New York, where nearly 3,000 professional workers were lost in the attacks. Locally, modifications have occurred in terms of export industries as well as loss of employment and structural modifications in employment across the city. Nationwide, the effects were numerous, and commenced with a restricted access of foreigners within the country to culminate with a sky high federal debt. In between, some of the economic effects of the 9/11 terrorist attacks include short-term disruptions in the trade relations with partner countries (namely Canada and Mexico) or the long-term difficulties of the airline and insurance industries.
Dolfman, M.L., Wasser, S.F., June 2004, 9/11 and the New York City Economy: A Borough-to-Borough Analysis, Monthly Labor Review
Makinen, G., 2002, Report for Congress: The Economic Effects of 9/11: A Retrospective Assessment, Federation of American Scientists, Retrieved from www.fas.org/irp/crs/RL31617.pdf on April 22, 2009
North, G., April 1, 2006, War on Terrorism's Economic Effects, Economic Edge, http://econedge.org/01/war-on-terrorisms-economic-effects / last accessed on April 23, 2009
O'Rourke, M., Spring 2005, The Impact of the "War on Terrorism" on Internal Conflicts, The Ploughshares Monitor, http://www.ploughshares.ca/libraries/monitor/monm05d.htm last accessed on April 23, 2009
Shah, A., 2007, War on Terror, Global Issues, http://www.globalissues.org/issue/245/war-on-terror last accessed on April 23, 2009
2009, The World Factbook -- United States, Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/us.html last accessed on…