A new study by economists at the Dallas Federal Reserve, entitled “How Bad Was It?” says a “conservative” estimate of the damage from the 2007–09 financial crisis is $14 trillion, or roughly one year’s U.S. gross domestic product. This is based on how much output was lost during the crisis and Great Recession, along with all the damage done to potential future economic growth.
Keep this in mind the next time bank lobbyists and flacks warn, as they habitually do, that new rules and regulations could slow the U.S. economy. Will rules to safeguard the economy vaporize $14 trillion in GDP? No? Then they’re probably worth doing.