Keywords: $700 billion bailout, Wall Street, economic crisis, healthcare, education, infrastructure, impact of bailout

The $700-billion bailout plan to rescue Wall Street may be in limbo, but there are already a series of questions from economic experts wondering whether the money could be better spent elsewhere. For the proverbial "little guy"--perhaps a subprime-mortgage holder or a small-business owner--the answer appears to be yes.

Matt Woolsey, who writes for Forbes magazine, says the economic bailout is commendable on the surface but the money could be better spent elsewhere. The effects of the bailout, he argues, could be felt in sectors other than finance for a number of years.  

"It's a monster plan, but there's little choice, according to White House and Federal Reserve officials," Woolsey writes. "Though much of the money may return to the nation's coffers over time as the treasury sells off the mortgage-backed assets it will purchase, the bailout will severely limit what the government can afford to spend on healthcare, energy, infrastructure and education in the years ahead.

"Let's start with the nation's infrastructure. The American Society of Civil Engineers estimates our nation's bridges need $180 billion in repairs, with our rail infrastructure in need of $185 billion in maintenance. California wants to spend $40 billion for the nation's first high-speed rail network to connect Southern and Northern California," he says in the article.

Such infrastructure upgrades would positively impact the construction industry, since there would be a need for a massive number of construction workers to do the repairs and maintenance. According to Woolsey, the construction industry's unemployment numbers are 40 percent greater than the rest of the country's workers.

Beyond infrastructure issues, the money expected to be spent on the bailout could also impact healthcare spending, a major concern for the 40 million Americans who are uninsured.

Woolsey says that only a small percentage of the proposed $700-billion bailout would be needed to implement government-paid healthcare for every single American.

"Healthcare and climate change are other major concerns," Woolsey writes. "Kenneth Thorpe, a professor of health policy at Emory University, points out that for $150 billion, you could provide every American with private health insurance and create a universal automated health-information system. When you consider that the National Cancer Institute receives $5 billion a year in funding, you could multiply its budget by 10 and provide private healthcare to every American.

"McKinsey & Co., a consulting firm, estimates it will cost the U.S. economy $150 billion per year to stabilize greenhouse gases by 2030. For three years, $700 billion could pay for the cost of both healthcare plans (in case one doesn't work) and cover the cost to reduce carbon emissions."

Can the little guy recover?

Chances are that no matter what happens over the next few days and weeks with the bailout, middle-class Americans will still have to curtail their regular spending habits. And although there has been some speculation that this crisis could lead to a depression--and as much as a 25 percent unemployment rate--some economic experts say the depression symptoms aren't there.

But a positive turnaround might not occur until sometime in 2010, which would still represent the worst economic period in America since the Great Depression.

Chris Isidore, a senior economic writer for CNN Money, recently wrote about how the bailout isn't going to be enough to help the average person rebound. In fact, Jerry Howard, the CEO of the National Association of Home Builders, believes $40 billion to $90 billion more is needed for the housing market alone, Isidore says.

"Howard said as soon as Congress returns to work from its upcoming recess, his trade group will be asking for another package of between $40 billion and $90 billion directed toward the housing market," Isidore writes. "And even if the bailout package is passed and banks start lending again, the events of the past few weeks could batter already 'abysmal' consumer confidence, said Keith Hembre, chief economist with First American Funds.

"Hembre said worries about the economy, falling home and stock prices and the weakening job market will lead consumers to pull back on spending over the next few quarters," continues Isidore. "If that happens, it would likely cause cutbacks in business and government spending as well."

Click here to read the full story on MSNBC.

Click here to view a slideshow in Forbes.

Click here to read more on CNN Money.

Readers' Comments