Alice Rivlin, director of the Office of Management and Budget under President Clinton, says the bailout package approved by Congress last week will act as a salve for the credit markets.

"I'm very glad they did this package. It was a victory for good government in the face of crisis," Rivlin, now a senior fellow at the Brookings Institution, told Bloomberg TV.

But will the package work?

"That depends what you mean by work," says Rivlin.

"I believe it will get credit flowing quite soon, even before the auction of securities that the Treasury has agreed to purchase. I think there will be a signaling effect that will loosen credit a bit."

To be sure, the bailout package won't immediately pull the economy out of the muck, she says.

"We have had consistently bad news on unemployment for nine months. I would say we're in a recession. The only question is how bad a recession."

Like many others, Rivlin sees the need for increased government oversight of financial markets.

"We need stricter regulation of the subprime market, to get rid of predatory lending and to rethink how much leverage we want in our whole financial system," she says.

Not everyone agrees with Rivlin about the wisdom of the bailout package. Jim Rogers calls it "welfare for the rich."

It amounts to "bailing out a bunch of people who are not making any sacrifices at all, or very few sacrifices," he told Toronto's Globe and Mail.