The Fiscal Side of Fighting Terror

[Mass]

http://economix.blogs.nytimes.com/2013/08/12/the-fiscal-side-of-fighting-terror/?hp

Ted Koppel wrote what I found to be a smart and resonant op-ed article last week in The Wall Street Journal. Though its focus is the United States reaction to terrorist actions and threats, there are, of course, economic and fiscal implications.

Riffing off the recent closure of our embassies in the Middle East, Mr. Koppel carefully forms an argument that after initially showing admirable restraint, we are now systematically overreacting to terrorist threats, in much the way they’d want us to (he’s of course not the first to make this point). He writes:

“Terrorism, after all, is designed to produce overreaction. It is the means by which the weak induce the powerful to inflict damage upon themselves — and Al Qaeda and groups like it are surely counting on that as the centerpiece of their strategy.

“It appears to be working.”
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Such numbers raise questions. Do they imply we’re overspending? On one hand, there have been no successful terrorist attacks on our soil, so how do we know we’re not devoting the optimal amount of resources to this? On the other hand, there is Mr. Koppel’s convincing argument about overreaction, which obviously carries a price tag, not all of which is covered in that table (e.g., the private costs of how our reaction has changed travel). And then there’s the fact that some domestic terrorist plots were disrupted not at the hands of armies or special operations, but by brave passengers on a Detroit-bound jet and by the New York police.
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