Dropping the color-coded terror alerts, which is what the Department of Homeland Security wants to do, would be a good idea, says Heritage Fellow James Carafano:

According to some estimates, every time the national threat level is raised to orange, the federal government incurs an expense of $1 billion per week. Factoring in the additional costs incurred by state and local governments—and the potential economic losses from reductions in consumer confidence, travel, and tourism—only makes the cost of this imperfect system more exorbitant. Yet the current advisory system ratchets up concern throughout the nation regardless of whether the nature of the risk warrants it. Without specific information as to the nature of the threat, states and localities are forced to decide between piling on expensive (and potentially unnecessary) layers of security and doing nothing at all.

A better system, says Carafano, would be one with fewer threat levels, that issued regional alerts instead of national ones, and that gave the public better information about how to respond to changes in threat levels.