The Washington PostDemocracy Dies in Darkness

How much did the financial crisis cost us? $12.8 trillion, one group says

Is it even possible to tally up the total impact of the financial crisis? Better Markets tried to give it a shot and puts the price tag at "no less than $12.8 trillion."

Better Markets, a non-profit that's pushing for stricter rules on Wall Street, explains its calculations in a new report: $7.6 trillion is the estimated actual GDP lost between 2008 and 2018—what the country's output would have been had the financial meltdown not occurred, according to data from the Federal Reserve Bank in St. Louis and forecasts from the Congressional Budget Office.

The remaining $5.2 trillion is GDP loss that was avoided, but only because it was prevented by the "extraordinarily fiscal and monetary policy actions" by the government during the crisis.

The report calls the $12.8 trillion price tag a "very conservative" figure, as it doesn't include a host of other costs, some of which can't be readily quantified: the conversion of investment banks like Goldman Sachs into bank holding companies that receive "full access to federal support for regulated banks" and the destruction of human capital through long-term mass unemployment, for example.

Better Markets produced partly as a response to industry-favored "cost-benefit analysis" of financial regulations that fails to take into account the very cost of the crisis itself. The group also stresses that "absent an understanding of the true costs of the financial and economic crises, a sense of complacency can arise and a lack of urgency to take action to prevent such crises from happening again, especially as the memory of these events and their impact fades."