During the discussion of the banking bailout, I said the US should put a buttload of money in the FDIC and let the banks that screwed up fail. The FDIC would protect the depositors' assets but the companies that did the dumb things they did would die.
Faeelin and others did not agree, with the former suggesting that course of action would lead to a "Lost Decade" in the US similar to Japan (IIRC).
Now, several months later, we can discuss the subject with the benefit of hindsight.
In my case, I work for a small-town newspaper and there was one bank in a neighboring county that failed (due to lots of construction loans that could not be paid back because the houses weren't sold) and was taken over by a bank based in my county. The FDIC insured the deposits, so nobody lost money, "my" bank took over, and everything was back to normal the next day.
Could this have happened on a larger scale, with healthy banks like BOA taking over Goldman Sachs and other entities that in TTL would have been allowed to fail?