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I think we can reduce terrorism by reducing the consequential price of dealing with the aftermath of terrorism. If every threat, shooting, bombing and hijacking yields ever decreasing returns, then the tactic will fall out of favor among the radicalized.
This is a thin line. On one hand you expend all of your resources and capture the perpetrators quickly and on the other you take more time and risk greater casualties. The thing that really propels this is the media coverage. Without 24/7 intense coverage, law enforcement wouldn't be as pressured to produce immediate results.