The overreaction to terrorism isn't a direct cost and its not part of the numbers I cited. Direct costs are insurance losses, medical care for victims, relief to widowers/widows, lost wages, etc. Those costs make up the numbers in my previous comment, which alone justify spending money on preventing terrorism. Indirect costs would be what your talking about and include things like unnecessary wars, wasteful spending on defense, currency/stock market devaluation, etc. Indirect costs are in the trillions but are harder to prove and reason about, which is why I omitted them.

I think Sam's getting at something important but it would be best to first start with estimating the costs as accurately as possible. As it stands Sam's estimates to the cost of terrorism are off by several orders of magnitude, so you can understand why I pointed that out.