Top-down approach

The rescue plan enacted in October gave broad authority to the Secretary of the Treasury to use as much as $700 billion to shore up the ailing financial industry. At first the plan was for the government to purchase troubled mortgage-related assets from banks to free up cash that could be used to extend credit to businesses and individuals. Recently the government took ownership stakes in some of the companies that received bailout funds. The plan will probably be revised further as the economic crisis continues.

Without an influx of cash, banks would have no money to lend to businesses to cover payrolls and the like, which leads to layoffs. And consumers would be unable to get mortgages or other types of loans, causing home prices to fall further and the overall economy to slow.

Economists say this approach will ultimately help millions of people who are falling victim to the souring economy. "The big policy efforts that have been put in place are an attempt to stabilize the job market, and that can only be done from the top down," says Mark Zandi, chief economist at the Moody's ratings agency. "Americans are not getting the cash directly, but it will shore up housing and mortgages and will ultimately lead to jobs. And not doing it now would only make it more costly later."

But back on Main Street, the rescue plan might seem a bitter pill because the money is going to the financial institutions that many see as the cause of the problem. The people we polled blamed several factors for the economic crisis, including poor lending practices by banks and mortgage companies (27 percent), lack of government oversight (26 percent), Wall Street greed (19 percent), and excessive borrowing by consumers (15 percent).

The impact of the crisis has been undeniable. Forty-one percent of our respondents said they feel less well off than they did a year ago, and 18 percent said they expect their family income to drop further. As job security and the value of investments decline for many, a majority in our survey said they're scaling back on everyday expenses such as dining out and entertainment (65 percent) and driving (60 percent). Fifty-seven percent are heating or cooling their homes less to save money.