The Rescue Plan: What It Will and Won't Do

Poole, who initially supported the government's bank investment plan, said he's also wary of another consequence. It appears, he said, that the government has made it mandatory for the country's largest banks to participate in the plan.

Initially, the plan was supposed to be voluntary, he said.

"I do not believe there is any statutory authority to make it mandatory," Poole said. "Should one of the banks challenge it in court and say to the Treasury, 'You have no authority to impose this on us,' ... it could further exacerbate the financial crisis."

No Avoiding a Recession

Experts agree that, in the short run, the new plan won't head off a recession.

A better lending climate may allow businesses to shed fewer jobs, but it won't stop job losses overall, Blinder said. The United States lost 159,000 jobs last month.

"The job cuts cause less spending and less spending causes more job cuts," Blinder said. "That's the vicious circle that defines a recession ... that dynamic holds true whether or not you have a credit problem."

And while the plan may make it easier for homeowners to obtain mortgages, it won't bring housing prices up to their old levels, analysts say. The prices, they say, were too high in the first place.

"I think the heart of the housing problem is that on average in the United States, house prices are still above equilibrium and house prices are going to have to decline," Poole said. "That means there will be defaults and foreclosures."

O'Driscoll cautioned against reading too much into the stock market's record rally earlier this week.

"I think that consumers and investors both are going to be cautious for a while. The exuberance of the stock market [Monday] isn't going to translate into immediate spending," he said.

"Most likely we're in a recession," he said, "and it's going to take a while to get out."