The Cost Of The Financial Crisis

by Stuart Shapiro

Estimating how much the financial crisis hurt the U.S. economy is important because it gives us an idea of how much we should spend to prevent future such crises.  The Dallas Fed is on it.

The financial crisis may have erased up to $14 trillion from the U.S. economy, according to a new report from the Federal Reserve Bank of Dallas.

Calling it a “conservative estimate,” the Dallas Fed determined that the crisis resulted in losses equal to $50,000 to $120,000 for every household in the country.

Put another way, the crisis erased nearly one year’s worth of economic growth from the U.S. economy, according to the new analysis, which was released around the five-year anniversary of the Wall Street meltdown.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.