Treasury Secretary Tim Geithner's scheme to stabilize the banking system through the Troubled Assets Relief Program (TARP) program is a "hopelessly ill-conceived policy" that enriches speculators at public expense, according to Mark R. Patterson, founder of Matlin Patterson, a buy-out firm which has taken a major role in the joint public-private bank rescues.

The comments are likely to embitter Geithner, the Obama administration appointee, because Matlin Patterson used the TARP’s matching funds to buy Flagstar Bancorp in Michigan, according to a report in The Daily Telegraph of London.

Patterson's "confession" appears to validate concerns that the bail-out strategy is geared towards Wall Street.

Patterson told The Telegraph that the Treasury is out of its league and seems to be trying to put off real, corrective action by pretending that the banking system is still viable.

“It’s a sham. The banks are insolvent. The U.S. government is trying to sedate the public," said Patterson.

The U.S. government has spent the equivalent of 29 percent of GDP at this banking crisis, as contrasted to 8 percent in the early 1930s, during the Great Depression, Patterson added.

Other business leaders appear to agree that the problems with the economy are more severe than the Obama administration is letting on to investors and consumers.

Barron's Magazine reports that Steve Ballmer, the CEO of Microsoft Corp., visiting Stanford University recently, told MBA students there that what the U.S. has been enduring is no run-of-the-mill depression.

Rather, Ballmer warned, this is a "resetting" of the economy to a much lower baseline level. This kind of dramatic economic downturn has only happened four times during the last 200 years, Ballmer said.