AP® United States History · Unit 9 · Topic 9.6
September 11 and the Twenty-First Century
The September 11 attacks triggered wars, new surveillance law, and a reorganized government, while a later housing bubble collapse showed how interconnected the financial system had become, dragging the whole economy into crisis by 2008.
On September 11, 2001, nineteen al-Qaeda hijackers crashed planes into the World Trade Center, the Pentagon, and a field in Pennsylvania, killing nearly 3,000 people. The response was not one war but a reorganization of American life. The US invaded Afghanistan within weeks to topple the Taliban and pursue al-Qaeda. Congress passed the Patriot Act, expanding government power to surveil, detain, and share intelligence on suspected terrorists. A new Department of Homeland Security consolidated dozens of agencies. In 2003, the Bush administration invaded Iraq, claiming Saddam Hussein held weapons of mass destruction, a claim that turned out to be false, opening a long and costly occupation separate from the fight against al-Qaeda.
A different kind of shock hit in 2008. Through the mid-2000s, banks issued risky subprime mortgages and bundled them into mortgage-backed securities sold worldwide as safe investments. When home prices fell starting in 2007, borrowers defaulted, those securities lost value, and banks that had bet heavily on them faced collapse. Lehman Brothers failed in September 2008, credit froze, and the crisis spread globally. Unemployment, around 5 percent in 2007, climbed past 10 percent by late 2009; home prices fell roughly 30 percent nationally. The federal government responded with bank bailouts (TARP) and a stimulus package, and recovery stretched through the early 2010s.
Both crises show government power expanding in response to perceived emergency, first security power after 2001, then economic intervention after 2008. Both also set up the next shift: a public that increasingly got information not from shared broadcasts but from personalized feeds, deepening political polarization and distrust in institutions already strained by war and recession.
Key terms
- Patriot Act
- 2001 law expanding government surveillance, detention, and intelligence-sharing powers to combat terrorism.
- Mortgage-backed security
- A financial product bundling many home loans together and sold to investors as a single investment.
- Subprime mortgage
- A home loan given to borrowers with poor credit, carrying higher risk of default.
- TARP
- Troubled Asset Relief Program, a 2008 federal bailout fund used to stabilize failing banks.
- Department of Homeland Security
- Cabinet agency created in 2002 to consolidate federal efforts against terrorism and other domestic threats.
Watch it explained
- How it worksWalk me through the response to September 11 from Afghanistan to the Patriot Act to Iraq.
- How it worksHow does a housing bubble in 2007 turn into a global financial crisis in 2008?
- Worked exampleShow me the unemployment rate and home prices through the 2008 crisis and the recovery.
- Going furtherWhat changes about American politics once a majority of people get their news from a feed?
Check yourself
End of topic.