In a classic instance of the Broken Window Fallacy, Krugman claimed that 911 had potentially favorable economic effects.
So the direct economic impact of the attacks will probably not be that bad. And there will, potentially, be two favorable effects.
First, the driving force behind the economic slowdown has been a plunge in business investment. Now, all of a sudden, we need some new office buildings. As I've already indicated, the destruction isn't big compared with the economy, but rebuilding will generate at least some increase in business spending.
Second, the attack opens the door to some sensible recession-fighting measures ... Now it seems that we will indeed get a quick burst of public spending, however tragic the reasons.
We tip our hats to Paul Krugman for providing such a patent instance of the broken window fallacy, and for proving beyond doubt that the appellation "economist" should only be applied to him with a tongue firmly in cheek.