Robert Kuttner made the following prediction in an article in the Huffington Post on March 30, 2009:
It's possible that the Geithner plan will "work" in the sense of re-starting the Wall Street bubble machine, this time with a limitless line of direct credit from the Federal Reserve. If that happens, it will defer an even more serious day of reckoning, as the cost of the Fed's immense credit creation comes due. But the greater likelihood is that the plan will merely enrich some speculators, but neither bring zombie banks back to life, nor get a normal banking and credit system operating again. And then the administration will need to come back to Congress, this time with less credibility, with the economy in even worse shape, having burned through more than a trillion dollars.
Do you think either prediction describes the current situation? - restarting the bubble machine with deferment of an even more serious day of reckoning? or zombie banks and having to go back to Congress for more bailout?
Is it somewhere between the two?