Let me see if I can say this right. If we do what Krugman and others like him want and they are wrong, what happens? We get rid of bad debt, we get rid of bad and stupid bankers we put the country back on the road to recovery quickly. Then we also nationalize some very large banks (we are already nationalizing small and medium banks weekly) for a short time. We then get rid of banks that "are too big to fail" so this kind of economic melt down will be much less likely to happen again. Essentially, nothing bad will happen if we go the Krugman route and we find it is unnecessary.
Now what happens if we go the Geithner route and he is wrong? Continued recession going into a possible depression. More money to the bankers and speculators and less to the "middle" class and working class (anymore the phrase middle class must be put into quotation marks as there is little real middle class left). The people who caused the recession left in power to do it again. The government buying these people out giving any loses to us the tax payers and any profits to the speculators. Finally, a continuation of the war against the middle and working classes by the wealthy and their minions. And those who got us here left in power to do it again and to profit from their mistakes (not at all like real capitalism). In other words: screwed.
What we have here is a failure of imagination. The people with the power simply are unable to look beyond their little area of muck. It is unfortunate, isn't it?