Bailout will have impact on everyday people, too
Published: October 2, 2008 / Author: Kelli Cheatham
SOUTH BEND — Most experts say a bailout plan will impact all Americans, whether it passes or not. From inflation to rising interest rates, many people want to know just how the trickle-down effect could have such a huge impact right here in the Midwest.
From questions about how the economic crisis happened to wondering how they will be affected, everyone has lots of questions and few certain answers about the uncertain economy.
“If there isn’t a bailout, yes I think it will get worse before it gets better,” said Notre Dame Finance Professor Tom Cosimano.
WSBT wanted to know how much worse it would get, and what the so-called “Crisis on Wall Street” and failed economic bailout plan means for everyday people.
Cosimano said the United States has not gone into a recession yet.
“As of right now [the economic situation] hasn’t gotten really bad,” he said. “But it could if it snowballs.”
Most of us already know the economic crisis is affecting the stock market, retirement funds and banks. But experts say you might not realize how it will also affect your ability to buy a home, apply for loans and even keep your job.
Cosimano said the housing market will get tougher because people will be required to make a larger down payment — like 20 percent rather than 10 percent.
It will be more difficult to get loans for things like cars or college because the loan process will be restricted, said Cosimano.
“If they do get a student loan, the interest rate will be higher,” he said.
Businesses will face a very real possibility of laying off employees because the cost of doing business will be higher, and employers will not be able to pay all of their employees.
Many people want to know how soon we could see the effects of an economic bailout plan that does or does not pass. Will it be tougher to get a loan by Thanksgiving? Christmas?
Cosimano said at this point, he doesn’t know.
“It’s too uncertain,” he said.
That uncertainty is turning into a game of wait and see.
“I’m sure something’s going to happen and it can’t be good,” said Ilse Dallmayr.
“If I can’t borrow money or anything, that will be a problem,” Paula Alfonso told WSBT.
Experts say large amounts of overseas trade are one reason our economy doesn’t seem as bad as it really is right now. Notre Dame Finance Professor Tom Cosimano said the length of this economic crisis depends on how quickly our representatives respond to the bailout plan.
In previous instances of economic crisis the economy has bounced back in a matter of months, even years.
To watch the WSBT News coverage of this story, click [here]