There is no way to work off a debt that big. But adding 30k plus per year to that debt (probably much higher for his luxury suite) is even worse. His debt to society is being paid with more debt to society.
What Bernie should have to do is work for x amount of years at a lowly job, or some job that he'd never take in life to earn back as much as he can during his sentence outside of the prison (not talking about a debtors prison but fraud). Financial fraud would re-think if they needed to work at McDonalds for years after during their sentence rather than their comfy suite. It is not like they wouldn't also be marked just like a normal locked up criminal is.
The point isn't paying off his debt (neither are fines, by the way). The points include justice, deterrence, and rehabilitation, depending on your moral viewpoint.
Also, what you describe is basically indentured servitude, which is a pretty old-fashioned form of punishment.
I am not talking about debtors prison, that is someone who goes to prison to pay off debts because they are in over their head and becomes a servant. I am talking about rehabilitation for a crime committed against others who worked hard for their money. There is a difference.
If you run a ponzi scheme, you are incurring large debtors prison type effects on others (taking their rights they earned -- they lose their hard earned money and have to work harder to get it back). The punishment should be the same for ponzi fraudsters at that level. They need to work throughout their sentence at a job to feel what they have done to others. They would also maybe get more insight out of it and rehabilitate more in life feeling the effects of what they have done. I am talking about cases for high profile fraud, again not debt prison for non-criminals but more like a fine that fits the crime just as we do today with that not costing us room and board.
What would be better for a guy like Bernie Madoff? Sitting in an everything provided cushy prison after stealing everyone's money or having to work back that debt through a job in society? He'd get alot more rehabilitation seeing how hard it is for the duration of his sentence. It will never happen but it is more closely rehabilitation than sitting in a prison costing tax payers even more. It would also keep him away from other high profile criminals. Locking him up and costing yearly to do so might make some feel good but it is a net loss further in many cases.
What Bernie should have to do is work for x amount of years at a lowly job, or some job that he'd never take in life to earn back as much as he can during his sentence outside of the prison (not talking about a debtors prison but fraud). Financial fraud would re-think if they needed to work at McDonalds for years after during their sentence rather than their comfy suite. It is not like they wouldn't also be marked just like a normal locked up criminal is.