With all the talk these days about credit derivatives, LIBOR and collateralized debt obligations, it’s no wonder the average American feels left behind by Wall Street and Capitol Hill. But in fact a majority of Americans have at least a small stake in Wall Street and consequently a stake in the outcome of the bailout plan forged by the Bush administration and refined by Congress.

More than 70 percent of U.S. households have money invested in retirement plans, roughly half of U.S. households own stocks, bonds or mutual funds and more than 50 million households have a mortgage, according to investment industry statistics and the U.S. Census Bureau. The long-term health of those investments depends directly on the overall health of the economy, said Larry Waldman, senior researcher at the University of New Mexico’s Bureau of Business and Economic Research.

And that’s the point of the bailout plan, he said. “It’s not to save Wall Street,” Waldman said, “it’s to save us.”

The Investment Companies Institute (ICI), a national advocacy group representing the mutual fund industry, reported recently that 71 percent of American households had retirement accounts in 2007 that totaled more than $17 trillion. The retirement plans range from Individual Retirement Accounts (IRAs) to traditional company and government pension plans, but most of the investments depend on a rising stock market to grow and keep pace with inflation.

About a third of U.S. households also have money invested in non-retirement stocks or mutual funds, according to the Census Bureau. Those folks’ fortunes generally rise and fall with the stock market. Though they may not be invested in risky businesses, most will be carried along for the downward ride when financial markets seize up, Waldman said.

And about 40 percent of U.S. households, or some 51 million in all, have a mortgage, with a total value in 2006 of more than $10.2 trillion, the Census Bureau says.

How the proposed bailout plan will affect the average American is anyone’s guess, judging by the range of experts’ opinions. University of New Mexico (UNM) professor emeritus and economist Allen Parkman says the U.S. economy is fundamentally sound — the gross domestic product continues to grow and unemployment is well below record levels. “I just don’t think there’s any reason to worry,” he said.

Parkman was especially critical of the original bailout plan and the way it was presented to Congress, he said. It was far too short on detail, gave too much authority to the Treasury secretary and provided no hint of what taxpayers might get in return for taking on the risk, Parkman said. “It turned out to be the biggest PR faux pas on the planet.”

But the average American whose retirement is invested in Wall Street and whose mortgage is stable shouldn’t sweat the recent volatility on Wall Street, he said. “It’s the real economy,” meaning employment, economic output and the like, “that in the long run affects the stock market,” Parkman said. “Whatever happens [with the bailout], the stock market five years from now will no longer reflect any of this.”

More than 120,000 active and retired New Mexico educators and another 75,000 active and retired public employees have a stake in the bailout through their respective retirement plans. Together the two funds total about $19 billion. Both are widely diversified and both anticipate an average, long-term return on their investments of 8 percent.

Jan Goodwin, the former New Mexico Secretary of Taxation and Revenue who since March has been executive director of the state Educational Retirement Board, said the current turmoil on Wall Street will have no impact on individuals’ monthly checks. “We’re a large, well-diversified fund that can withstand a downturn like this,” she said.

The $8 billion fund is invested in a wide variety of sources, including stocks, bonds, Treasury bills and real estate, she said. Though it has lost value in recent months, its average return over the last several years has been above 8 percent, Goodwin said.

The state Public Employees Retirement Association is in a similar situation, said Executive Director Terry Slattery. Its fund has been losing value for more than a year, he said, and is now about $11 billion. He said he was troubled by the turmoil on Wall Street, particularly the tight credit market that is choking off the flow of capital to the businesses and individuals that need it.

“We’re very diversified, but when the market goes one way or the other it affects us,” Slattery said. A prolonged contraction of the U.S. economy could drag down his fund’s overall performance, he said, forcing the need for higher contributions from current employees.

Mortgage holders have nothing to fear, even though it’s possible their own mortgages were chopped up, bundled with other mortgages — including the now-infamous sub-prime mortgages that are going into foreclosure left and right — and then sold around the world in a bewildering manner. Though the spate of foreclosures continues to drag down average home prices, UNM’s Waldman said good mortgages won’t be dragged down by the failure next door.

“You’re as safe as anything could be,” he said. “Whoever holds that mortgage isn’t going to affect you.”

After the House killed the first rescue plan, Congressional leaders revised it enough to win Senate approval Wednesday night. Now it’s back for another vote in the House, where support is thought to be strong enough to win this time. Even if it does pass, it’s unclear what effect such a plan will actually have. And though no one can guarantee that a bailout will prevent a recession, Waldman said he’s among those who think it’s a better option than doing nothing.

“I believe they have to pass something, because the downside risk will be worse,” he said. “You really don’t know how bad it can get when the market stops working.”