Watch CBSN Live

Consumers Await $700B Wall Street Rescue Plan

This story was written by Joanna Pelletier, The Daily Vidette

The Federal Reserve's plea for quick passage of the $700 billion rescue plan has left the general public with mixed emotions about how the intended bailout will affect taxpayers, financial firms and the economy.

The bill would allow the federal government to purchase bad mortgage-related assets from domestic financial institutions over the next two years.

Illinois State University sophomore accounting major Randall Smith does not believe that the bill will do anything to alleviate America's economy nor benefit college students.

"If [the bill] is passed, it's going to increase inflation and eventually affect my parents, who are paying for college," Smith said. "It's not affecting the spending market, but it will eventually affect the lower-paying jobs that college students work."

Smith explained that he believes the market is currently experiencing a natural state of going through an extreme low before it goes through an extreme high.

"Every economy has its ups and downs and this one has had its ups," he said. "To go through the good, you have to go through the bad."

The market has certainly seen the bad recently, with roller-coaster swings on Wall Street over the last two weeks.

With almost no liquidity - the willingness of companies to buy and sell assets to one another - the market almost reached a complete standstill last Friday.

Fixed income trader Peter Koziara of TransMarket Group LLC, a major trading firm in Chicago, said that the market has not normalized, so its definite effect on college students is impossible to predict.

He speculated that the current situation could make it more difficult for recent graduates to find work.

"There will always be work, but you will be competing twice as hard for half as many jobs," Koziara said.

Assistant professor of economics George Waters added that students seeking jobs in the financial sector may have a more difficult time finding work than students going into teaching, the medical field or the sciences.

"The overall job market depends on the degree to which the financial crisis spills over to the rest of the economy," Waters said.

Koziara also speculated that if the government does not do anything about the financial sector, banks may not be able to fully compensate for students' monetary needs.

Also, if unemployment and the national deficit both increase, it may become even more difficult for future students to afford a college education.

In this case, fewer candidates would be able to apply for jobs in the skilled professional market, which will benefit those who already have an undergraduate degree.

But according to Waters, Bush's goal for the bill is for everyone to benefit.

"The government's plan of buying toxic assets as cheaply as possible [makes it so] that financial firms are not rewarded and everyone avoids a severe recession," Waters said.

View CBS News In
CBS News App Open
Chrome Safari Continue