AMERICA has increased homeland security spending by more than $1 trillion in the decade since the 9/11 attacks. A new academic paper [PDF] from John Mueller (of Ohio State University) and Mark Stewart (of the University of Newcastle in Australia) attempts to determine whether the return on investment justified those huge expenditures. They also ask whether policymakers ever considered anything remotely resembling a cost-benefit analysis before they spent all that money. The answer in both cases, it seems, is no:

[T]o be deemed cost-effective, [the increased expenditures] would have to deter, prevent, foil, or protect against 1,667 otherwise successful Times-Square type attacks per year, or more than four per day. Although there are emotional and political pressures on the terrorism issue, this does not relieve politicians and bureaucrats of the fundamental responsibility of informing the public of the limited risk that terrorism presents and of seeking to expend funds wisely. Moreover, political concerns may be over-wrought: restrained reaction has often proved to be entirely acceptable politically.

Gulliver has always argued that many post-9/11 "innovations" in homeland security are not worth their cost. But the findings in this paper are truly remarkable. By 2008, according to the authors, America's spending on counterterrorism outpaced all anti-crime spending by some $15 billion. Messrs Mueller and Stewart do not even include things like the wars in Iraq and Afghanistan (which they call "certainly terrorism-determined) in their trillion-plus tally. There's lots in the paper to dig through, and the authors are publishing a book this fall on this same topic that I am eager to read. But I found this section—an attempt to explain why America spent all that money—particularly interesting:

[A] most common misjudgment has been to embrace extreme events as harbingers presaging a dire departure from historical patterns. In the months and then years after 9/11, as noted at the outset, it was almost universally assumed that the terrorist event was a harbinger rather than an aberration. There were similar reactions to Timothy McVeigh's 1995 truck bomb attack in Oklahoma City as concerns about a repetition soared. And in 1996, shortly after the terrorist group Aum Shinrikyo set off deadly gas in a Tokyo subway station, one of terrorism studies' top gurus, Walter Laqueur, assured the world that some terrorist groups "almost certainly" will use weapons of mass destruction "in the foreseeable future." Presumably any future foreseeable in 1996 is now history, and Laqueur's near “certainty” has yet to occur.

In other words, we're probably overestimating the likelihood of another 9/11. Sure, smaller-scale attacks are probably more common. But as Matt Yglesias notes, small-scale terrorist attacks like the bus and restaurant bombs that Israelis have been subjected to in the past are almost impossible to stop with traditional security measures: "It's not something you can prevent by putting metal detectors and bomb sniffing dogs on all your buses."

Even if increased security could prevent attacks on high-value targets like the Twin Towers, it would run the risk of simply pushing terrorists to attack softer targets. And according to Messrs Mueller and Stewart, the increased cost of post-9/11 security measures can only be economically justified if we were certain that, absent those measures, one 9/11-style attack would succeed each year. Does anyone really think such attacks are that likely? Anyway, take a look at the paper if you have a few minutes and let us know what you think in the comments.