By: Danielle Ulman

$23.7 trillion is a lot of money.

But before you get all upset about the potential price TARP cop Neil Barofsky said it could cost the federal government to bailout the financial system, you’ve got to see the conditions it would take to reach that sky-high cost.

Barofsky, the special inspector general for the Troubled Asset Relief Program known as TARP, wrote in prepared testimony for a Tuesday appearance before a House committee that support costs could reach $23.7 trillion, but his accompanying report noted that the estimate was pretty overstated.

According to analysis from The New York Times, here’s a list of some of the more outlandish things included in that number:

• maximum cost of programs that have been canceled or never got off the ground
• every home mortgage backed by Fannie Mae or Freddie Mac does into default
• all homes are worthless
• every bank in America fails with assets worth nothing
• Treasury would default on securities purchased by the Federal Reserve system

To get his $23.7 trillion figure, Barofsky added all the Federal Reserve programs at $6.8 trillion and determined the TARP program could end up costing $3 trillion.

Barofsky then added $4.4 trillion in other possible Treasury programs, $2.3 trillion in F.D.I.C. guarantees of deposits and $7.2 trillion from various mortgage-related programs

Even if the estimate was correct, the report acknowledges that double counting could come into play where more than one federal agency has provided guarantees for the same companies.

Treasury Department spokesman Andrew Williams called the figures “distorted.”

“These estimates of potential exposures do not provide a useful framework for evaluating the potential cost of these programs,” Williams told Bloomberg News. “This estimate includes programs at their hypothetical maximum size, and it was never likely that the programs would be maxed out at the same time.”

Williams said the government has spent $2 trillion so far, which kind of sounds puny when you think about Barofsky’s potential $23.7 trillion.