—Would you like me to drag up Wall Street’s performance post 9/11?—
Uh, you can, but I’m not sure what you think that would prove. Most people seem to think its performance has to do with the bursting of a nasty tech bubble, explosion of corporate overvaluation, stagnation of productivity, and other such things that have a direct effect on the operation and outlook of the ENTIRE economy (as it pertains to stock investment), not just the loss, however tragic, of the WTC, the wing of the Pentagon, and countless invaluable people and their expertise, which however horrendous as a media event, is a very very small effect from a demographic and economic scale.
—All that costs money.—
Indeed, but compared to the operation of the U.S. economy… and the size of things like the yearly expenditure budget, the yearly tax revenue, the deficit, etc. it’s still a pretty small amount.
Most people don’t even have a sense of the scale we’re talking here: which is one reason some people seem to think that we can drastically reduce the size of government simply by cutting a few social services.
Check here: http://www.cbpp.org/9-3-02bud.htm
Just the technical factors (i.e. projection errors alone) account for more than twice the expected cost of extra proposed military spending insofar as the dissappearance of the surplus. And this is deceptive in several ways. First, a lot of that extra military spending has little to do with fighting terror, but rather is part of the pork glut we experienced mid-season (like financing the development of fighter jets to face off with a next generation of MiGs that will never exist) and is pretty hard to justify in terms of the war on terrorism. A good portion of that is an increase in foriegn aid approved by the Bush admin. Finally, the CBO is required by law to work with numbers that understate a lot of important things.
And remember: these numbers are only talking about what happened to the projected ten-year surplus, NOT the entire ten-year budget, which dwarfs all these things.
And the government budget is itself a lot smaller than the U.S. economy. So, yeah. 9/11 was traumatic, but not a big player as far as economic impact. We were in for this recession long before it even happened, and the real sorts of factors one might look at, from high levels of public debt to overstocked inventories, have little to do with 9/11, or indeed much to do with government action in general.