As long as the present political trend continues, we will never come all the way back.
Economic Hit From Crisis: A Very Big Number
The global loss of economic output as a result of the banking crisis may be between $60 trillion and $200 trillion, Bank of England Executive Director for Financial Stability Andrew Haldane said Tuesday.
In a speech on the costs of "banking pollution," Haldane said the direct costs to government of bailing out banks may prove to be small, amounting to less than £20 billion, or a little more than 1% of gross domestic product. In that case, any levy on banks to recoup the cost of the crisis would also be small, less than £1 billion a year in the U.K., and less than $5 billion a year in the U.S.
But he said the direct costs to the government "almost certainly .. underestimate..the damage to the wider economy that has resulted from the crisis."
"Evidence from past crises suggests that crisis-induced output losses are permanent, or at least persistent, in their impact on the level of output if not its growth rate," Haldane said. "If GDP losses are permanent, the present value cost of the crisis will exceed significantly today's cost."
Haldane estimated that lost output over coming years may total between $60 trillion and $200 trillion for the global economy, and between £1.8 trillion and £7.4 trillion for the U.K. economy. |
