Economic impact of the attacks

Real Estate Damage - the cost of rebuilding the Pentagon is approximately $300 million. The WTC complex damage is in excess of $40 billion dollars.

Airline Industry Layoffs - American Airlines, the nation's largest airline, announced that it would lay off at least 20,000 employees. United Airlines, the nation's No. 2 airline, also came out with plans to cut about 20,000 jobs in the wake of the attacks. Boeing announced it was laying off up to 30,000 employees. U.S. Airways announced it would lay off 11,000 employees. Continental laid off 12,000 employees, or 21 percent of its work force, over the weekend. Other major airlines have announced more than 26,000 layoffs and say that figure could reach 100,000 in the coming weeks as a result of the grounding of flights following the Sept. 11 attacks and prospects for seriously reduced business in the coming months. That's a total of almost 200,000 jobs!!!

Airline Industry Bankrupcy - Midway Airlines of North Carolina closed down last week while in the midst of reorganizing its financially troubled business, laying off 1,700 employees. America West Holdings Corp. said Wednesday it was one of several airlines that may be forced to file for bankruptcy unless Congress quickly provides financial aid to the industry.

Stock Market - in the first hour of trading Thursday, the Dow was down 239.68 at 8,519.45. With Thursday's early decline, the Dow has lost 1,076 points so far this week. Major market gauges have lost almost 10 percent in their first three days of trading since it resumed after the attacks shut markets for the longest period since the Great Depression.

 

Add to the above:

Cost of the airplanes - new 767's cost anywhere from $100 - $138.5 million dollars. (See: http://www.boeing.com/commercial/prices/)
Cost for the 4 lost airplanes is $200 - $300 million.

Cost of investigation - 4,000 FBI agents, thousands of local police, firefighters, EMS and special agents work on this case. Let's just say a total of 10,000 people @ $150/day = $1.5 million/day.

Cost of retaliation - military actions are very expensive. The Persian War cost $61 billion at the time ($79 billion in 2001 dollars). Operation Infinite Justice will cost tens of billions of dollars!

 

Plus:

Cost of replacing WTC technology - the cost of restoring and replacing information technology and communications infrastructure in and around the former World Trade Center could reach $15.8 billion, according to a preliminary estimate by an independent research firm (Reuters).

correction to the Pentagon damage estimate - WASHINGTON (Reuters) - The damage inflicted on the Pentagon by a hijacked airliner that crashed into the building on Sept. 11 will cost at least $520 million to repair, the Defense Department said on Tuesday.

TV and Cable ad revenue loss - Christopher Dixon, a media analyst at UBS Warburg, estimated that $320 million in television (ABC, NBC, CBS) advertising has been lost so far. Add to that the cable channels (CNN, FoxNews, MSNBC, CNBC) and the number is approaching $1 billion of lost ad revenue.

 

WASHINGTON (AP) - A potential $100 billion price tag for America's response to terrorism and reviving an economy further weakened by last week's attacks could revive federal deficits next year for the first time since 1997.

 

The U.S. stock market shed $1.38 trillion in value since the attacks!

[ September 21, 2001: Message edited by: webmaster ]

 

MINNEAPOLIS (AP) - Northwest Airlines announced Friday it will cut 10,000 jobs, or 19 percent of its work force, and reduce service by 20 percent to counter a business slowdown in the wake of terrorist attacks in New York and Washington.

The carrier attributed the action directly to last week's terrorist attacks.

 

The world's two largest reinsurance companies said Thursday the terror attacks on New York will produce the largest claims they have ever faced, doubling their previous estimates to $3.2 billion.

Munich Re, the largest reinsurer, said this year's damage claims from the U.S. terrorist attacks could cost it $1.95 billion before taxes.

In Zurich, Switzerland, Swiss Re said the strikes will cost $1.25 billion after taxes this year.

 

. . . and the total cost for the terrorists was less than $200,000 (flight schools, house rental, car rentals, flights, etc.)

I'm positive that the terrorist organizations made tens of millions on short-selling related US stocks before the attacks.

 

House OKs $343 billion to fight terrorism - The House overwhelmingly approved a $343 billion defense bill late Tuesday after diverting some money from President Bush's prized missile defense program to counterterrorism efforts.

 

NEW YORK (CNNfn) - Delta Air Lines, the nation's third-largest airline, announced plans Wednesday to cut about 13,000 employees, or about 16 percent of its staff.

 

<BLOCKQUOTE>quote:</font><HR>Originally posted by Joy:
How do you think this will affect taxes? <HR></BLOCKQUOTE>

In the short term taxes will have to be reduced to boost the economy. In the log term, the government will have to either cut programs or raise taxes.

 

WASHINGTON (AP), Sept 26 — Federal Reserve Chairman Alan Greenspan and former Treasury Secretary Robert Rubin told tax-writing senators Tuesday that any plan using tax cuts to stimulate the struggling economy should be large enough to be effective, possibly as much as $100 billion.

 

WASHINGTON (AP) - Carl Chambers' job crumbled with the World Trade Center on Sept. 11, and since, he has relied on his union and government help to make ends meet.
"I lost my family and my friends and my job," he said. "I lost everything."

. . . Layoffs could climb to 500,000 in industries related to the airlines and travel, said economist Mark Zandi of Economy.com. The nation's unemployment rate soared to 4.9 percent in August from 4.5 percent, the biggest one-month jump in more than six years.

. . . The economic output lost from the attack is expected to amount to some $25 billion in September alone. The air passenger and freight industry will take the biggest hit, losing almost $5 billion in the month, followed by the hotels and securities industries, Zandi said.