Felix Salmon, author of Axios Markets
Share on facebook (opens in new window)Share on twitter (opens in new window)Share on linkedin (opens in new window)Share on email (opens in new window)
Like many human tragedies, 9/11 was great news for defense contractors. Over the course of the past 20 years, they’ve brought in a stunning $7.35 trillion in revenue, according to a Defense News database. The overwhelming majority of that money came from the Pentagon.
Why it matters: Gone are the days when most of the defense budget was spent directly on soldiers. Since 9/11, war has become “modernized” — which means it’s fought with extremely expensive weapons bought from highly profitable private-sector companies.
Flashback: When the New York stock market finally reopened on 9/17, still surrounded by ash from the smoking Twin Towers, the S&P 500 fell by a sharp 5% from its closing level on 9/10 — and then kept on falling over the subsequent days.
Be smart: The growth in private-sector outlays is unlikely to end any time soon. “What you are seeing is primarily funding for R&D and procurement of weapons,” says Todd Harrison, a defense budget analyst at the Center for Strategic and International Studies.
Defense contractors generated $7.35 trillion since 9/11 (axios.com)
Click here for reuse options!