Monday, the House of Representatives shot down the proposed $700 billion bailout with a vote of 228-205, sending the Dow into a freefall of 777 points. The bill — backed by President Bush and both parties’ presidential nominees — proved too divisive among the state representatives for many reasons: some claimed it was too hastily cobbled together, others were simply too scared of angering their constituents in an election year. One particularly favorite mantra of dissenters was that the bailout amounted to saving Wall Street tycoons from their own bad decisions at the expense of tax payers.

This “Wall Street versus Main Street” mentality, though, is far too simplistic. It neglects the simple truth that the failure of the government to act on the current financial crisis will directly affect all Americans, not just traders and banking executives. You might think I mean because stocks are dropping, but I don’t. The stock market goes up and it goes down: a loss of 777 points can be recouped in a matter of days, so that is not what should concern the average American.

What I’m talking about is the credit market: if institutions stop lending money, the consequences are far-reaching. And the institutions I’m talking about are not small players: these are countries, sovereign wealth funds, pension funds, hedge funds, and major banks. If they stop lending and investing, that will directly hurt you. Here’s how:

1) It will be harder to keep your job. Most businesses — small and large — depend on short-term loans from banks to cover their day-to-day operating costs. If banks stop approving such loans, businesses have to make ends meet somehow, which usually means cutting jobs.

2) It will be harder to get loans. Without government action to shore up confidence in the financial system, it will become even more difficult for the average consumer to secure auto loans, student loans, and home loans. These loans have already frozen up, and we’re seeing the consequences in those industries.

3) It will be harder to sell your home. It’s already a tough time in the housing market due to the subprime mortgage mess, but if you’re trying to sell a home or foreclosure is looming, the freezing up of home loans is an even bigger deal for you. After all, even if you’re lucky enough to have a potential buyer for your home, he might not be able to convince a bank to lend him the money to make a bid. Now you’re stuck.

The bailout bill rejected by the House yesterday is not the end of this legislation: it will now be further debated, reworked, and voted on again. The important thing to realize is that, whether you call it a Wall Street bailout or a rescue package, this bill directly affects you and your ability to save and spend. More than 600,000 jobs have already been lost this year, and the longer the government takes to step in, the more that number will grow. This is not a time to drag our heels.