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A security guard looks out a window at the offices of troubled insurer American International Group Inc. Wednesday in lower Manhattan. Its bailout left stock markets on edge.

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.

2. Don't panic. If you move all your money out of stocks and into a money fund now, you run the risk of missing profits when the market recovers — assuming it does.

3. Rebalance. If you've set targets for your investments — say, 60 percent stocks and 40 percent bonds — check your balances. If you now have a 50 percent-50 percent split between stocks and bonds, sell enough bond funds to get your asset mix back to 60 percent stocks and 40 percent bonds.

Savers

This appears to be a good time to put some money in the bank.

Banks, eager to build their cash reserves and faced with a tightening credit market, began to boost savings rates even before the recent turmoil.

Since the end of April, when the Fed last cut interest rates, yields on the average one-year CD have climbed to 2.4 percent from 1.9 percent, according to Bankrate.com. But yields at some banks are as high as 4.6 percent.

Saving has become an increasingly urgent priority for Monique Shankle, a former Enron employee and contracts adviser for an offshore engineering firm in Houston who has spent the past few years recovering from $60,000 in losses from her Enron retirement fund.

Now, the 401(k) she has with her current employer has lost several thousand dollars in value. Fearing tough times, Shankle says she is saving more cash, hiding her credit cards and delaying the purchase of a new car.

"It's like Enron all over again," she says. "You've got to be prepared for whatever happens."

Taxpayers

Across the nation, people are wondering what the government has gotten them into as taxpayers with all the federal bailouts.

There's no telling how much taxpayers ultimately will pay for the recent federal efforts to stabilize the system. But things may look worse today than they will a few years from now.

Taxpayers made money after the government guaranteed loans of more than $1 billion to Chrysler in 1979. The auto company paid the loan back in full and the Treasury Department made a profit when it sold the Chrysler stock it got in the deal.

The Resolution Trust Corp., which was created in 1989 to dispose of the assets of failed savings and loans, cost taxpayers far less than initially feared.

"Often, (bailouts) end up being moneymakers," says Jon Faust, director of the Center for Financial Economics at Johns Hopkins University. He says it's likely the Fed will make a little money, break even or lose a little.

How would the Fed lose the entire $85 billion from AIG? "The only way that happens is if the economy really collapses," Faust says. "But if the economy collapses that is the least of our problems. You're going to wonder why you didn't spend more."

Those upset about the government actions need to keep in mind what would have happened if there had been no action, JPMorgan Chase senior economist James Glassman says. The economy could have slowed further, leading to less tax revenue and thus higher levels of debt. "If you don't address the crisis, the real cost to the public can end up being far worse."

Credit card users

Average credit card interest rates have fallen as the Federal Reserve has cut its short-term interest-rate target to just 2 percent. And yet, that doesn't mean people are paying less for credit. Those who miss a payment, send their checks in late or exceed their credit limits can discover penalty fees as high as 32 percent.

Card providers likely will collect more than $19 billion from consumer penalty fees this year, up 5.5 percent from 2007, according to consulting firm R.K. Hammer.

Consumers are relying on credit cards more than ever, especially as it gets harder to land home equity loans. Revolving debt — much of it on credit cards — hit a record $969.9 billion in July. People are starting to use their cards for necessities such as groceries and gas, credit counselors say.

As the credit market gets tighter, that could be a big problem for consumers deemed to be bad credit risks, especially those who have mortgages that adjust to rising rates. Lenders are sending them fewer offers for new cards and trimming credit limits for the ones they already have.

The story's different, though, for people with solid payment records. Credit card providers are giving them more cards, and allowing them to charge more, according to data from Equifax, one of the three credit bureaus.

"We're not seeing (card) lenders doing a full-scale pullback at all," says Myra Hart, senior vice president of analytical services at Equifax. In general, there seems to be moderate growth in overall credit available to consumers.

• Mortgage borrowers

Excesses in mortgage lending got the current mess started.

Delores Nettleton, 75, a retired elementary school teacher in Spokane, Wash., sees merit in the old ways of home lending.

"When I was a young bride and we were looking for a home, we had to have so much down and you could not go over a certain percentage of your salary," she says. "If people had stuck to those rules we would not be in the situation we are in."

But here we are, and lenders have taken a big step toward tighter lending rules since the steep decline in home values began in mid-2006.

Interest rates have been down lately: 5.82 percent last week on a 30-year fixed-rate mortgage, down from 6.06 percent the previous week, the Mortgage Bankers Association said Wednesday.

But banks are making it hard for many borrowers to take advantage of the lower rates by tightening lending standards. The bar likely will be raised much higher now that Freddie Mac and Fannie Mae have been taken over by the government.

They "are on a mission to be sure every loan is perfect," says Brian Koss, managing director of Mortgage Network, mortgage bankers in Danvers Mass. "It doesn't matter what the interest rates are, if you can't qualify."

• Small businesses

Nearly 50 percent of the nation's 27 million small businesses say they've been "impacted by the credit crunch," according to a July survey by the National Small Business Association trade group.

Bankers often want to keep lending to large corporate customers and, as a result, don't have enough cash for small businesses, says NSBA president Todd McCracken. That forces small business owners to use high-interest credit cards as their main source of capital.

Predictably, many are postponing big purchases, not filling vacant jobs and cutting back on business travel and advertising. Spooked by the Wall Street meltdown, they're moving personal and business-related cash to safer, federally insured savings accounts and CDs, McCracken says.


Contributing: Anna Bahney, Dennis Cauchon, Kathy Chu, Christine Dugas, Barbara Hagenbaugh, Edward Iwata, Matt Krantz and John Waggoner