The goal of the stimulus and bailout plans was to turn a sharp crisis into a more drawn-out one. Without it, we risked having massive unemployment as businesses stopped and everybody tried to sort out where the "real" money was (as opposed to the money that was borrowed).

It seems to have been effective at that: we stemmed the crisis by throwing a few trillion dollars at it. It could yet again turn down if people lose confidence, but the rise on Wall Street suggests that investors are looking forward.

Unfortunately, those trillions have to be paid back eventually, so we turned a short-term massive crisis into a long-term debt. All of that money injected risks turning into the other kind of crisis: inflation.

So while the immediate peril has passed, the problems are not yet over. The government is going to have to gradually raise interest rates, which will be unpopular because it will cut short the rally we're seeing right now.

Further, although foreclosures have been stemmed, they haven't all been worked out yet. A lot of borrowers simply paid too much for their homes, and that value isn't coming back. It's still not clear who is going to take that loss: bankruptcy and foreclosure often puts it on the bank, but the homeowner often pays as well. It will be years working all of that out.

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