The terrorist attacks of 9/11 killed nearly 3,000 people, damaged the health of many exposed to the aftermath, destroyed billions of dollars’ worth of property, and brought the nation’s air-transportation system to a halt. Over the longer term, they also prompted sweeping policy responses aimed at strengthening homeland security, retaliating against those responsible, and adopting a more hawkish approach to the Middle East.
Over the past quarter-century, researchers and budget authorities have quantified the financial cost of this horrific event and its many consequences. In commemoration of the 25th anniversary of the attacks, I have sought to combine several of these efforts, extrapolate where necessary, and convert the amounts to 2025 dollars.
Finally, a reason to check your email.
Sign up for our free newsletter today.
No one can fully tally the consequences of an event as momentous as 9/11 or know how American policy would have evolved had the attacks never occurred. Even a conservative accounting, however, puts the cost well above $100 billion in lives, health, property, and broader economic damage. Including the longer-term policy response, roughly $1 trillion in homeland security spending and another $1 trillion for the war in Afghanistan can reasonably be attributed to the attacks.
More debatably, one might add another $1 trillion or more for the war in Iraq. Other attempts to quantify the broader costs of the post-9/11 security state and counterterrorism have gone much higher. A 2021 study from Brown University’s Costs of War Project, for example, assessed the total budgetary impact at $8 trillion.
To put these figures in context, America’s annual GDP is about $30 trillion, federal spending about $7 trillion, and federal debt held by the public a little over $30 trillion.
Estimates of 9/11’s costs differ in important ways, and some can’t simply be added together. One would not want to count, for example, both the loss of a building and the loss incurred by the insurer that paid for it. Similarly, while the costs to the New York area matter in themselves, some took the form of businesses relocating elsewhere in the United States rather than leaving the country or ceasing to exist. And some federal agencies created after 9/11, including the Department of Homeland Security and the Transportation Security Administration, assumed functions previously performed by other agencies or private actors.
To estimate the nationwide costs conservatively, I confine the analysis to five well-defined categories: 1) lives lost in the attacks; 2) longer-term health effects; 3) the short-term economic slowdown; 4) sustained increases in homeland security spending and the resulting transportation delays; and 5) foreign policy. Each component is estimated separately, with the sources explained below, so readers can disregard or adjust any individual estimate as they see fit.
Start with the price in lives lost. In cost-benefit analysis, federal agencies have long wrestled with how to value a human life. In one sense, the cost is infinite; yet individuals and governments plainly place limits on what they are willing to spend to save a life. Economists address this through the Value of a Statistical Life (VSL), which estimates society’s willingness to pay for small reductions in mortality risk. The VSL is inferred from evidence such as the wage premiums that workers demand for riskier jobs and from survey data, and it tends to rise as living standards increase.
At the time of 9/11, the Department of Transportation used a number that amounts to about $5.5 million in 2025 dollars. Multiplied by the 2,977 fatalities, that’s a cost of over $16 billion.
Beyond the lives lost, many people exposed to the attacks suffered lasting health problems. The federal government has compensated victims and paid directly for their care; those expenditures provide a useful, if imperfect, proxy for the resulting costs. To avoid double-counting, payments for those killed in the attacks should be excluded, since those are already captured by VSL estimates. Keep in mind, too, that the compensation programs may have underpaid some victims, missed others entirely, and covered some health conditions not actually caused by 9/11.
In 2025 dollars, the Victims Compensation Fund initially awarded a little less than $2 billion for injuries, followed by another $20 billion in total payments after being reopened in the 2010s to address new claims. In addition, the World Trade Center Health Program and its predecessor have spent more than $8 billion in 2025 dollars (including New York City’s 10 percent share). That makes roughly $30 billion.
As for 9/11’s short-term economic damage, studies of the effect on U.S. GDP, including business interruptions, generally estimate losses of $80 billion to $160 billion (in 2025 dollars), as summarized in a 2011 review by Adam Rose and S. Brock Blomberg. Most of those losses resulted from reduced air travel and tourism during the two years following 9/11.
Then there are the homeland security costs. For fiscal years 2001 through 2017, the Office of Management and Budget estimated total federal homeland security budget authority, regardless of whether the funds flowed through the Department of Homeland Security (which did not yet exist in 2001). The Stimson Center compiled these figures in a 2018 report.
The fiscal 2001 budget provides a useful pre-9/11 baseline. Following assumptions used elsewhere in the 9/11 cost literature, one can estimate the additional spending attributable to the attacks by supposing that homeland security spending would otherwise have grown at 3 percent annually in nominal terms. In fact, homeland security budget authority doubled between fiscal years 2001 and 2002 and had doubled again by 2008.
These calculations, adjusted to 2025 dollars, indicate nearly $1 trillion in additional budget authority through 2017, with excess spending averaging about $60 billion annually over the final five years of the series. (Even assuming a 5 percent annual baseline increase, the total excess still surpasses $800 billion.)
Extending the figure through the present is more speculative, since the official series was discontinued and a recent surge in the DHS budget clearly reflects the pandemic rather than some belated consequence of 9/11. If the roughly $60 billion in annual extra spending observed at the end of the official series is carried forward through fiscal 2025, the total rises to about $1.4 trillion. In principle, one could subtract the private airport-security spending that existed before 9/11, but it amounted to only about $1 billion per year in 2001 dollars, a rounding error in this context.
The short-term economic damage reported above includes the immediate travel disruptions. But enhanced airport security has imposed lasting costs on the private sector, as individuals and businesses bear the burden of longer screening delays under the TSA than under the private security system it replaced. One estimate put the price tag for those at $10 billion yearly in 2010 dollars, broadly consistent with a newer, though less formal, analysis by economist Mallika Pung. As a rough extrapolation, multiplying that figure by 23 years (to minimize overlap with the short-term losses already counted) and converting to 2025 dollars yields an estimate of more than $300 billion.
These numbers are, admittedly, some of my least certain. But they comfortably top $1 trillion total.
Finally, there are the foreign policy expenditures. The Afghanistan war was launched in direct retaliation for 9/11 and became part of the broader Global War on Terror, which also included, most controversially, the invasion and occupation of Iraq. Beyond the initial response, however, it becomes increasingly debatable as to how U.S. foreign policy would have evolved had 9/11 never occurred.
These wars are federal undertakings with readily available budget figures—though one can certainly challenge, for example, whether soldier pay adequately compensates for the burdens and risks that soldiers face, and the official totals leave out future spending, such as veterans’ health care. Even so, the Pentagon’s estimates of direct taxpayer costs are substantial. Adjusted for inflation, they total $1.2 trillion for the war in Afghanistan through fiscal 2024, plus another $1.2 trillion for the wars in Iraq and Syria, which are reported together.
The figures above represent a conservative approach to tallying 9/11’s costs, focusing on clear consequences of the terror attacks for which publicly available, reasonably well-defined estimates exist. The attacks imposed many other costs as well, including additional security spending by state and local governments and private entities (which one early post-9/11 estimate put at more than $10 billion yearly), the opportunity costs of money devoted to terrorism insurance, and much else. The 2021 Brown University Costs of War study arrived at its roughly $8 trillion estimate by including items such as interest payments on new debt, projected future health-care costs for veterans, and increases in the baseline Department of Defense budget beyond direct war spending.
In a single day, the 9/11 attacks claimed thousands of lives and caused immense destruction. They also prompted a range of policy responses aimed at retaliating against those responsible and preventing similar attacks in the future, multiplying the costs to the United States many times over. A quarter-century later, Americans are still paying for many of these obligations.
What’s the takeaway? Because the indirect costs far outweigh the direct damage, some might argue that the United States overreacted. Taken to its logical conclusion, this view suggests that, had we simply cleaned up and declined to retaliate, we could have avoided trillions of dollars in “security theater” and “forever wars.” But it is mistaken to assume that such restraint would not have invited further aggression by signaling weakness, and unrealistic to believe that a nation subjected to an attack of this magnitude was even capable of responding in that way. A vigorous response to mass murder was both justified and likely inevitable.
This analysis cannot resolve a quarter-century of debate over retaliation, preemption, occupation, surveillance, and homeland security. It does, however, demonstrate that a single successful terrorist attack can impose trillions of dollars in costs on the United States—and that preventing such attacks carries immense value.