Either way we're screwed. We either mimic the Japanese situation with a 20 year recession, (the Nikkei is still well below 1990 highs!) or we're headed for inflation as the fed keeps devaluing the dollar to make paying our debts more affordable. It was mentioned the other day that interest payments on the national debt will exceed all other government spending in the next 10 years! Thats just the interest. And of course, if the rest of the world thinks the US will default on its debt (or is massively inflating) they will unload faster than we can blink to cut their losses early. Over the last 100 years we've worked ourselves into a fiscal corner and one of the solutions will probably be higher interst rates. But thats political suicide and would stall any hopes of an economic recovery. In other words, it'll never happen. Oh, and BTW, Japan has racked up so much national debt trying to "correct" their 20 year recession that they're now on the verge of insolvency. Thats what happens when you keep zombie financial institutions and business' on stimulus life support.