Five years after the housing bust that triggered the financial crisis that in turn produced the worst U.S. recession since the Great Depression (and contributed a few years later to a Eurozone economic crisis that has left many European countries worse off than the were in Great Depression), we can much better assess its aftermath. Government bean counters have pretty good estimates of how much debt had to be written off as a result of bad mortgage debt write offs (which were concentrated in the subprime housing lending markets, although in the hardest hit markets, losses have been widespread).
The bottom line is that roughly a trillion dollars ($1,000,000,000,000.00) of household mortgage debt alone has been written off so far.
This corresponds to some of the most bearish estimates made when the collapse started in 2007, such as the one made at Calculate Risk (to which I have linked).
This is on the same order of magnitude, for example, as the cost of one year of federal spending, or the cost of the Iraq and Afghan wars combined.
The subprime mortgage industry that created the problem has virtually ceased to exist. Almost none of the subprime lending specific firms, or the subprime divisions of larger banking institutions, that created the crisis are still operating. They closed there doors mostly within a year or two of the collapse.
There have also been big declines in other asset classes and in incomes. The median Colorado income is down about 7% since the collapse according to a recent Denver Post story, with suburbs and industrial cities hit harder than Denver proper and college towns.
Most people knowledgable about current economic conditions (myself included) on the eve of the collapse knew that the U.S. economy was overleveraged and that the U.S. has a number of serious housing bubbles in places like California, but weren't sure why or how to change that in a way that wouldn't have disasterous effects. The markets and private law rules decided to solve both problems, disaster be damned, before anyone managed to take decisive action to address either issue. Now, real estate prices at back at the levels suggested by long term historical pre-bubble trends (or even a little less in a few cases) and the U.S. economy is less leveraged than it has been for a very long time.
Five years after the collapse, in my own professional life, about two-thirds of my work load in any given month is still directly traceable to working out who will have to bear which share of the $1 trillion of losses in individual transactions that was sustained in the aftermath of, and as a consequence of, the financial crisis. The new business transactions and tax planning work that dominates my professional life during economic boom periods has just started to pick up again in the last six months or so.