Americans want bailout - poll
CNN poll finds most Americans support government intervention, but they are concerned about the cost to taxpayers.
NEW YORK (CNNMoney.com) -- Bail out the financial industry, but don't send me the bill.
That's what a majority of Americans are saying, according to a CNN poll released Monday. The poll showed that people are concerned about the economy, and a majority favor government action to help bail out the struggling financial institutions. But people are concerned that the proposed industry-wide bailout will burden taxpayers.
Of the more than 1,000 Americans surveyed in a national CNN/Opinion Research Corp. poll, 62% said they think in general the government should step in to try to address the problems facing struggling financial institutions. The margin of error was plus or minus 3 percentage points.
But the poll, conducted Sept. 19-21, showed that Americans think the cost of the $700 billion plan being debated in Congress is too high.
Though 55% said they favor the proposed bailout, 65% said it would probably treat taxpayers unfairly.
The drop off in support for the government's actions could stem from the fact that taxpayers may have to foot the bill for all these bailouts. The majority of CNNMoney.com readers voiced similar concerns in a Talkback blog over the weekend.
Still, 88% of 518 respondents said they are concerned or even scared by the tumult in the financial markets.
And 55% supported the government's actions taken so far - such as the $85 billion loan to insurer American International Group (AIG, Fortune 500) and hundreds of billions in backing for mortgage finance giants Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) and Wall Street brokerage Bear Stearns.
Economists say that the cost to the taxpayer is not yet known - and probably won't be close to the headline number.
"For the average person, $700 billion sounds like a whole heck of a lot of money," said John Silvia, chief economist for Wachovia. "It's reasonable to look at that number and be scared about it, but in the end, the Treasury may actually make money from the deal."
That's because the government is proposing to buy up troubled assets that banks don't want, with the intention of selling them later when the market is better.
"There's a chance they could sell them at a decent price," Silvia said.
Furthermore, the cost of doing nothing may be much more severe.
"Because of the hit that capital took, there wasn't any lending going on, which created a lot of complications with people getting mortgages," said Silvia. "If these companies have to write down loans, they're going to make even fewer loans in the future."
Since the markets are all circular and related, failing companies can negatively impact people's ability to get a mortgage, finance a car or even save for retirement.