The twists and turns and trials and tribulations of the economic crisis are forcing government officials to reshape policies on a day-by-day basis in ways that have not been seen in decades, says economics professor Nicole Simpson.
While there now seems to be agreement that new regulations are needed to address the crisis, government officials must walk a fine line in determining what will do the most good over the long term, she says.
“It’s going to be a very tricky balance because you want the markets to work efficiently,” Simpson says in the latest episode of Colgate Conversations, a podcast series that highlights members of the campus community.
Simpson discusses the $700 billion bailout package approved by Congress and some of the initiatives discussed by President-elect Barack Obama, such as his call for a major infrastructure investment that she says can positively affect employment and consumption and provide long-term benefits.
Strangely enough, she adds, difficult issues such as health care reform might actually stand a chance of being addressed because of the crisis.
“This is a time to be innovative.”
The economic situation is influencing one of Simpson’s new research areas. Working with colleague Felicia Ionescu, she is exploring the explosion in the number of private loans used by students to pay for college.
As credit markets remain tight and force Sallie Mae and other lenders to secure additional financing, private loans might become harder to get, creating difficulties for families.
In addition, the economics professors are researching how parents’ credit histories might affect what kinds of loans their children can get, and consequently what kinds of schools they might be able to attend.
A proponent of hands-on learning for students, Simpson also talks in the podcast about the Volunteer Income Tax Assistance (VITA) program she runs at Colgate.
In 2008, 30 student volunteers helped about 500 local families file their taxes for free. The program returned more than $1 million to local filers, money that many families would miss out on if it weren’t for VITA volunteers.
To listen to the complete podcast, please click to listen now or right-click and “save target as” to download file. You also can go to the Colgate Conversations page or iTunes page for more download options.