Wisconsin Questions Loom After Bailout Bill Fails
UW-Madison Experts: Taxes Would Go Up
Updated: 8:10 am CDT September 30, 2008
MADISON, Wis. -- When the $700 billion bailout bill failed in the U.S. House on Monday, the stunned silence could be felt coast to coast.
VIDEO: Watch The ReportCongress is now scrambling to come up with another plan, but many people in central Wisconsin have lingering questions.Questions such as, how did the nation get into the situation to begin with."Housing prices ran up really fast and people lent money on houses--so they provided mortgages, basically under the wrong assumption that housing prices could never go back down," said UW finance and investments professor Mark Ready.Ready said that when the market went from boom to bust, companies collapsed.The question also remains – would $700 billion be enough to bail the country out of the crisis?"I would hope it would be enough, but it's literally a timetable of how does the economy, how do the financial institutions react with the inflow of cash they'd be getting?" said financial adviser Brent Lindell."Nobody really knows," said UW real estate and economics professor Timothy Riddiough. "If it works well we could end up spending nothing and actually making a profit."Would the multibillion dollar plan pay for itself?"If the government ends up buying low enough and selling high enough, if this thing is really successful the government could make a profit," said Riddiough. "Actually, I don't think a lot of people understand that. They think it's going to end up costing $700 billion and that's what the price tag is going to be and that's not it at all.""There's the big question – a loan, free standing, I kind of doubt it," said Lindell. "That's my personal opinion. I think most certainly you would see a tax increase."Amid the crisis, is now a good or bad time for consumers to take out a loan?"I would say that right now if you can go out there and find something and get approval, I've got no problem with it," said Lindell. "I think it's a great time to go out and get it."In the long run, experts said the crisis could work itself out without help from the government, but it would be painful and slow.They said unemployment would continue to rise and companies, especially small ones, would continue to struggle.
VIDEO: Watch The ReportCongress is now scrambling to come up with another plan, but many people in central Wisconsin have lingering questions.Questions such as, how did the nation get into the situation to begin with."Housing prices ran up really fast and people lent money on houses--so they provided mortgages, basically under the wrong assumption that housing prices could never go back down," said UW finance and investments professor Mark Ready.Ready said that when the market went from boom to bust, companies collapsed.The question also remains – would $700 billion be enough to bail the country out of the crisis?"I would hope it would be enough, but it's literally a timetable of how does the economy, how do the financial institutions react with the inflow of cash they'd be getting?" said financial adviser Brent Lindell."Nobody really knows," said UW real estate and economics professor Timothy Riddiough. "If it works well we could end up spending nothing and actually making a profit."Would the multibillion dollar plan pay for itself?"If the government ends up buying low enough and selling high enough, if this thing is really successful the government could make a profit," said Riddiough. "Actually, I don't think a lot of people understand that. They think it's going to end up costing $700 billion and that's what the price tag is going to be and that's not it at all.""There's the big question – a loan, free standing, I kind of doubt it," said Lindell. "That's my personal opinion. I think most certainly you would see a tax increase."Amid the crisis, is now a good or bad time for consumers to take out a loan?"I would say that right now if you can go out there and find something and get approval, I've got no problem with it," said Lindell. "I think it's a great time to go out and get it."In the long run, experts said the crisis could work itself out without help from the government, but it would be painful and slow.They said unemployment would continue to rise and companies, especially small ones, would continue to struggle.
Previous Stories:
- September 29, 2008: Wisconsin's House Delegation Splits Over Bailout Plan
- September 24, 2008: Bush Explains Financial Crisis To Nation
- September 23, 2008: Fallout From Financial Bailout Could Impact Many
- September 23, 2008: Editorial: Greed Precipitated Current Financial Crisis
- September 2, 2008: Study: Families Hit Hard By Slumping Economy
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