Terrorism Harms Local American Economy

AP Photo/Craig Ruttle

Too many times the economic effects of terrorism are discussed at the macro level. It is often stated that the United States economy is so large that it can absorb the economic effects of these attacks, which are growing in number annually. This is not a false argument, but it is an incomplete one.

First a harsh reality: Our law enforcement agencies have a monumental task in uncovering and stopping potential attacks, but they are limited and will never be one-hundred percent successful at the task. Fewer Muslim terrorist attacks occur in America because it’s not yet optimal for them. The global pattern is consistent, effective to a great degree, and will repeat here.

Common sense is needed to understand terrorism and the day to day realities. Terrorism is the use of violence and intimidation in the pursuit of political aims. In its current radical Muslim form, modern jihadist terrorism uses social change with an end political goal of a caliphate that combines the political and the religious into a theocracy. This is the antithesis of free societies.

This is also about Main Street, not Wall Street.

Terrorists, like criminal organizations, study our public and private responses. Taxpayer costs come in the form of first responder response. When an event or attack happens, there is a cost in paying law enforcement, fire, emergency medical personnel, and the support staffs needed.

For example, often local law enforcement are kept past shift or called in to supplement. If big enough, Federal agencies reallocate resources. They have to be paid. Budgets are already slim if not in the red. Investigations take time and have an associated costs. At the same time resources that are reallocated take away from ongoing investigations. Often this becomes an overtime issue, which carries a cost. Already strapped taxpayers will eventually pick up all these costs.

Private business, small and large, pay an often unrecoverable cost. First, at the point of attack. If it’s a small business, then often they cannot absorb the loss. Second, near the point of attack. In the example of the recent terrorist attack in Chattanooga, TN by Muhammad Youssef Abdulazeez, one location is a strip mall. All the small businesses and the McDonald’s in the strip are affected to some degree by loss of retail activity. The McDonald’s may be a franchise. A current survey of McDonald’s franchisees shows a dismal outlook for their businesses. Some of these employees will lose income. For many Americans living on the margins, this can be an economic death knell which then turns them to the state for help at taxpayer expense.

These micro economic realities then have a macro effect. As more and more businesses and people lose economically, we will see an ongoing stagnation of economic activity. Economic indicators like consumer confidence, consumer expenditures, and luxury spending – not supercars and yachts – but speeding beyond sustenance-based items need to be watched closely. We have a weakened economy at home and globally. Multiply this by hundreds or thousands in your communities, then millions across America. Terrorists and terrorism can and do advance their goals by successful economic warfare on Main Street.


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