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Terrorist Attacks Caused Astronomical Economic Damages

Posted September. 24, 2001 08:48,   


Above all, the loss of 6,300 lives at the collapsed World Trade Center would never be a matter of money. And the future material and immaterial damages as well as the economic damages of the airline companies are hardly to be counted into the amount of money. Including the Northwest that decided to lay off 10,000 workers on 21st, the American airline companies plan to cut down the personnel of 80,000. The airplane manufacturing company Boeing Co. also decided the reduction of the 30,000 workers.

The total 430 billion dollars (about 560 trillion won) of the U.S.`s superior companies` stocks evaporated at the stock markets in New York and London with the sharp downfall of the stock price following the terrorist attacks on the U.S., reported the Britain`s Guardian magazine.

And the industrial production has been paralyzed for a week since the terrorism, bringing about the economic loss of 40 billion dollars (about 52 trillion won). And uncountable economic damages took place in the U.S.`s companies that have sent over 25 percent of the exporting goods to the G7 countries via airline.

The insurance companies also suffered from the gigantic economic damage. The Standard & Poor`s Corporation estimated the damages of the insurance companies to be 19.2 billion dollars (about 25 trillion won). But other analyst forecasted that the damage could reach the maximum 70 billion dollars (about 91 trillion won).

Since the atrocities in New York and Washington, the consumption has fallen down by 30 billion dollars (about 39 trillion won).

A huge amount of expenses would be necessary for the damage restoration and the retaliation warfare. The U.S. President George W. Bush announced the support plan of total 80 billion dollars (about 104 trillion won), including 40 billion dollars for the reconstruction of the damaged buildings, 15 billion dollars for the airline companies, and 18 billion dollars for the national defense.

The economic experts forecasted that the terrorist attacks would take away the anticipated U.S.`s financial surplus of 170 billion dollars (about 225 trillion won) this year.

The U.S. government has discussed the measures to recover the damaged economy. The Congress has reviewed the tax cut of 180 dollars (about 234 trillion won) and the expansion of the governmental expenses for improving the economic situation, reported the LA Times.

Prof. Paul Krugman (Economy, Princeton University) offered an optimistic view, ``The benefits from the reconstruction of the buildings are larger than the losses from the collapse of the buildings. The U.S. government`s expenditure expansion of gargantuan amount would be the positive variable for the economic recovery.``

Kwon Ki-Tae kkt@donga.com