“We are talking about an entire years’ worth of GDP, the entire production of the entire American economy wiped out because of this financial crisis.”
I’m assuming he’s talking about the output gap between GDP pre-crisis and that trend and the current GDP now. What he ignores is that letting all the banks go with no inervention would likely have cost a multiple of this number.
Another thing he ignores is that the original TARP bill was simply to provide a backstop for the banks. in order to calm the markets. That was bastardized into the monstrosity that was passed by Congress because Barney Frank and Nancy Pelosi loaded it up with pork.
I think your assumption is incorrect. Towards the end of the interview Mr. Barofsky said: The last crisis cost $13 trillion.
This number is close to the GDP of the U.S., so I think he literally meant the total annual economic output of the U.S. I’ve never seen a number that high as regards the losses associated with the crash, but I’m far from an expert on the subject.