This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Could the U.S. Economy Withstand Another 9/11?

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- On Sept. 10, 2001, the U.S. economy was in a soft patch, partially due to the dot-com crash. The day after 9/11, it was softer. Ten years later, the U.S. economy is several notches softer again. Could the economy manage the shocks of a second 9/11?

In the soft economy that surrounded 9/11, the fed funds rate reached a low of 1%. Unemployment reached a high of 6.3%. Federal debt was about 56% of GDP. Shortly after the news of 9/11, gold prices skyrocketed 33% to $287 in London trading, and the New York Stock Exchange closed -- for four days.

When it reopened on Sept. 17, 2001, the Dow Jones Industrial Average plunged 685 points, its largest single-day point drop. In one week, the Dow dropped 14.3%. Consumer confidence had its biggest one-month drop, falling from 114 to 97.6.

9/11 no longer has the record for the largest Dow point drop. That was surpassed twice in 2008. 9/11 no longer has the record for a monthly consumer confidence point drop either. In October 2008, confidence fell from 61 to 38. Four years after the Great Recession officially began, unemployment is still over 9%, federal debt is 100% of GDP, the fed funds rate is 0.25%, gold is over $1,800, and consumer confidence is 59.5. The economy is much weaker today.

Bin Laden chose his targets for maximum effect, including the selection of America, the lone military and economic superpower. His targets were the country's greatest military and economic iconic structures.

Bin Laden, who fought against the Soviet Union during their failed 1979 to 1989 war with Afghanistan, took credit for taking the superpower status from the Soviet Union. If his surprise and savage assault on America went according to plan, the cascading events would take the superpower out of the U.S.

The costs of property damage, and lost wages and business income have been variously estimated between $50 billion to $100 billion. In bin Laden's 2001 residence of Afghanistan, these damages would have been 10 to 25 times GDP and crippled the nation. For the $11 trillion U.S. economy, the dollar losses were minimal. 9/11 included, the 2000 to 2001 recession was mild with a duration two months shorter than average. America's resilience was as strong as ever, but the economy was also much stronger than it is today.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
TSLA $212.10 -4.70%
YHOO $36.94 2.61%
AAPL $93.24 -1.01%
FB $117.26 -0.68%
GOOG $701.43 0.82%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs