A margin play in a declining market simply hastens the decline. The term "margin play" refers to a situation where one takes out a loan, invests it, and hopes the return on the investment is greater than the interest on the loan. It is a form of legalized gambling.
In all likelihood, the person making the margin play does not have better knowledge than the rest of the market. In a declining market, people making margin plays will need find some way to cover their margin.
Of course, in some cases a player might have insider knowledge. For example Tim Geitners' friends in Goldman Sachs had insider knowledge on undervalued equities in the economic collapse. The special loans by Paulson and Geithner to Goldman Sachs allowed the firm to leverage its insider knowledge and make out like bandits in the economic turmoil. However, these special deals did not produce any global benefit. It simply allowed those with insider connections to reap the benefits of economic chaos.
The idea that we will stop this declining market by extending billions in loans to small businesses runs the risk of being nothing more than a margin play in a declining market. There might be some transfer of wealth from the community at large to businesses with insider access. The result of the margin play is likely to be nothing more than an acceleration of the centralization of the economy with little benefit for society at large.
NOTE: Margin plays in a growing market appear, at first, to be a good idea. A margin play in a growing market has the effect of increasing the rate of incline. The problem is such leveraged positions end up creating market bubbles which inevitably burst.
If we wish to have long term stability, we need a system where people develop and build equity. We need a system like the one advocated by Adam Smith and we need to move away from the Marxian/Keynesian systems.
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