Many people are under the assumption that Wall Street‘s business transactions, particularly the transactions requiring a liquid credit market, have little to no affect on our daily lives.

This is a false assumption.

In fact, so many details of our daily lives are impacted by Wall Street that it is difficult for me to even begin to fathom.  I’m not an economist, nor would I ever choose to be (far too boring), but if you have a job in private industry, chances are pretty high that your boardroom level superiors are spending more time than ever before tracking the daily economic news.

Therefore, one could argue that it’s in everyone’s best interest to take note of this historic financial crisis, and consider the implications of the U.S. Government not stepping up and taking action.  Regardless whether you agree with the so called “Wall Street Bailout Bill” or not, here are a few likely implications of taking no action.

5 plausible scenarios for the infamous Wall Street trickle down effect.

1. Small business owners can’t secure additional business loans.  The trendy wine merchant down the street from you, which just recently opened up, can’t get a short term business loan to restock her dwindling inventory.  She has little cash reserves, and will be forced to remain in a holding pattern until she can afford to restock.  This could lead to slower sales, laying off employees, or potentially losing her business.
2. A family owned farm can’t secure credit to buy seed and/or fertilizer. Fertilizer prices hit all time highs in 2008 due to increasing global demand, and with credit markets tightening up, the farmer can’t buy fertilizer.  He takes a substantial hit on his crop yield for the year, which causes his annual profits to be far lower for the year than anticipated.  If this happens on a larger scale, our nation’s food prices will continue to increase because the food supply is reduced.
3. Student loans become more difficult to obtain.A recent high school graduate can’t get a student loan because there is little to no interest in funding his education.
4. The cost of low to middle income apartment rentals begin to rise.  Since obtaining a mortgage will likely be more difficult to obtain in the immediate future, first time home buyers with no down payment and average (or below average) credit scores will be denied the American Dream of home ownership.
5. State and County governments collect fewer revenues from income taxes. While most of us probably wouldn’t cry if the local tax man collected less of your hard earned paycheck, consider the implications of our basic infrastructure deteriorating into disrepair or becoming less reliable.  Constant maintenance needs to be performed on the most basic of services.  Things like fresh water delivery, sanitation, and even waste disposal could rise in cost.  Perhaps the local school systems could suffer as well.  The government pays for more services than you would think.

I’m certain there are far more examples, but these are just a few that display the real world effects on the individual, as well as on the collective.  If you have more examples, please share them in the comment section.

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