One-On-One: The Bailout And You

11Alive's Jaye Watson sat down with economist and finance professor Dr. Peter Eisemann of Georgia State University.

These are excerpts of her conversation with Eisemann about the bailout and its potential impact on Metro Atlantans.

We talked with Dr. Eisemann in his 12th floor office of the J. Mack Robinson College of Business in downtown Atlanta.

"I think the feel around here, to a person, was that the government had to do something pretty quickly because things were at the point of just crashing," Eisemann said.

Eisemann said the market started seizing up last week.

"The way the banking system is oriented is banks loan money to each other as well as individuals and businesses and the confidence had gotten so low, that banks had stopped lending money to each other or they were charging extremely high rates and so what that basically did is stop the credit mechanism of our economy. And that would mean individuals would have difficulty getting mortgage loans, car loans, any type of loan that they had," he said.

We asked Eisemann how taxpayers were going to foot the bill for the bailout as had been reported.

"That money is going to be used to buy loans so it's not like the money is all gone. The money is going to be used to buy loans and we'll find out how much those loans turn out to eventually be worth. So in other words we aren't going to lose $700 billion as a country, we're going to lose less than that if the $700 billion number is accurate," Eisemann said.

Eisemann says without a bailout, Metro Atlantans would have been directly impacted.

"If you care about borrowing money, if you care about accessing your money market mutual funds, if you care about the value in your 401-K plan, you care about the buyout because what the buyout is going to do is it's going to stabilize financial markets, give people access to credit, access to their market accounts," he said.

We also asked him why the word "depression" seemed to be popping up more often, in newspaper and online articles, in televised interviews.

"We are nowhere near a depression. The depression era, we had a tremendous amount of unemployment, the bank failure was huge. We may have a recession in our economy but we're certainly not going to have a depression. We're nowhere near that kind of territory," he said.

Our final question to Eiseman was, "So what is this a bad time to do?"

Eiseman's answer: "Borrow money. It's a good time to start thinking one's financial plan, thinking more about savings and making less use of debt. One of the problems with these firms that are in trouble right now, is that they used way too much debt and that lesson is also good for us to live with."