Crisis hits American wallets in a variety of ways

The years of easy money were fun while they lasted. Banks and credit card providers were so flush with cash that they could help virtually anyone pay for whatever they wanted.

But the party's over.

That's been marked by the shuddering collapse of Lehman Bros., the sale of Merrill Lynch, the federal government's $30 billion loan to foster the sale of investment bank Bear Stearns, its $200 billion injection to Freddie Mac and Fannie Mae, and its $85 billion loan to American International Group.

We've entered a period of tight credit — which could mean jobs lost, retirement plans pruned, college deferred and lifestyles diminished.

Across the nation, Americans know something's wrong.

Nearly one-quarter of adults — 23 percent — believe the U.S. economy is in a depression, according to a USA TODAY/Gallup Poll taken Monday and Tuesday. That's nearly double the 12 percent who said so in February.

People haven't lost hope. Nearly half — 47 percent — say they expect the U.S. economy to be growing a year from now. That's roughly unchanged from the 44 percent who expressed the same view in the earlier poll.

The complications stemming from the credit crunch worsened Wednesday, as investors bailed out of stocks for the second time in three days, causing a net drop in the Dow of 812 points this week — more than 7 percent.

The new era of tight credit, and the government's response to the crises in the financial markets, are touching Americans in a range of ways:

• Retirement investors

If you're in a 401(k) savings plan, you've had a jarring week.

Even though the S&P 500 plunged more than 4 percent Wednesday, owning a basket of stocks, such as a diversified stock fund in a 401(k) plan, often is far better than owning an individual stock. Blue-chip General Electric fell 6.6 percent Wednesday, for example, and investment bank Morgan Stanley tumbled 24.2 percent

Most people don't invest all their money in stocks. Of the $4.6 trillion in retirement accounts at the end of 2007 about 68 percent was invested in stocks, with the rest in money market funds and bond funds, which have risen modestly in value.

Analysts generally offer three tips to help ease the pain:

1. Keep contributing, especially if your company matches your contributions.