Davis says it will take time but that there has to be some optimism that consumer finance companies, car companies and mortgage originators will begin to see that they can obtain short-term funding and will, in turn, increase credit to consumers.
Farr points out that other things the government is doing should have a more immediate impact than this latest plan.
"The Federal Reserve (has begun buying) Treasury bonds; that will have a direct impact on the market; and they've started buying mortgage-backed securities. The Fed also has some programs designed to achieve some of the same objectives this new Treasury plan is after. The TALF, or Term Asset-Backed Securities Loan Facility, is designed to make a secondary market for things like auto loans and credit card receivables."
Investing may be the furthest thing from your mind if you're struggling to find a job or pay bills. But for those who are attempting to weather this storm by loading up on low-yielding Treasuries, it may be time to consider taking on a bit of risk, even though by all accounts it appears that the economy will take a significant amount of time to return to what most would consider a healthy state.
"The Treasury market is deemed to be a safe haven, but you're taking on interest rate risk -- the risk that rates will rise from today's very low levels and devalue the bond that you hold (as the price of the bond drops). And you're taking on inflation risk," says Farr.
"If you have a 10-year Treasury with a yield of 2.8 percent and inflation is higher than the market anticipates, even by a very small amount, that bond is not going to be the safe haven you expected. If you want to take on credit risk, you could buy investment-grade corporate bonds with yields in the 7-percent range. They make a lot of sense, in particular for retirement accounts. You don't have the downside risk that (you) would with an equity instrument and you have a nice return. These bonds will be hurt if there's a sharp rise in interest rates or inflation, but not to the same degree as Treasuries because their yields are high due to the high credit spreads today."
Of course, there is always the other end of the spectrum. Dan Deighan, a financial planner at Deighan Financial Advisors in Melbourne, Fla., agrees that people holding Treasuries will "get absolutely hammered," but he doesn't think corporate bonds are the way to go.
"The challenge with all bonds is that when interest rates go up, bond values go down. And when you look at everything in play right now in our economy, it screams for interest rates to go up. What we're buying now are hard assets. We're either buying gold, gold bullion -- and clients are taking possession of it -- or we're buying income-generating real estate of a commercial nature."
Deighan says it will be a very long time before the economy bounces back.
"Seventy percent of our economy is predicated on consumer spending. Everybody was spending all of their equity that was really just on paper. We've spent our growth for the next 10 years. It's gone. We're going to have to suck it up as individuals, as families, as businesses and as a country. Back to normal isn't the way it was a year ago."
If talking with a Certified Financial Planner would help you make some decisions in this tough market, check Bankrate's database to find one near you.