To fill in the “black hole” between remaining S&L assets and what is owed to depositors will cost about $200 billion in 1991 dollars. By any measure, this is a lot of money and is in fact about equivalent to the undiscounted $500 billion figure ineptly professed by the General Accounting Office and widely echoed in media reports, political speeches, and on talk shows.

An important aspect of this cost is that it is history—gone for good. It will not come back as the result of an economic rebound, for instance. In fact, the longer it takes to pay off this bill, the higher it will go.

I speak with less conviction about such non-dollar costs of the S&L crisis as the loss of public confidence in public institutions and their officials. I do, however, believe they too are significant, and I do not agree with the cynics who argue that there was little or no confidence left to lose.