THE ECONOMICS OF FEAR
August 16, 2006
Terrorism has not crippled economic growth, nor has it frustrated the spread of globalization. Not yet, anyway, says columnist Robert J. Samuelson.
- Since 2001 the world economy has expanded more than 20 percent.
- For the United States, the gain is almost 15 percent; for developing countries, more than 30 percent.
- World trade -- exports and imports -- has risen by more than 30 percent.
- Outstanding international debt securities have jumped almost 90 percent, to $13.6 trillion (through the third quarter of 2005).
Even when huge, terrorism's costs can get lost in a $13 trillion economy, says Samuelson:
- At last count, Congress had committed $432 billion to the wars in Iraq and Afghanistan -- a far cry from informal estimates of $50 billion to $200 billion before the Iraq war.
- The Congressional Budget Office now projects that those costs could easily exceed $800 billion by 2016.
- A study by Linda Bilmes of Harvard and Joseph Stiglitz of Columbia puts the war's ultimate budget costs even higher, at a minimum of $1.1 trillion in present value.
- Still, this spending is a tiny share of all federal spending, estimated at $47 trillion from 2001 to 2016.
Source: Robert J. Samuelson, "The Economics of Fear," Washington Post, August 16, 2006.
For text (subscription required):
Browse more articles on Economic Issues