While Nouriel Roubini writing in Forbes believes that the stimulus efforts have been necessary, he accurately analyzes the road ahead and it runs us right off a cliff. The entire article is worth reading here.

Governments cannot run deficits of 10% or more of GDP, and they
cannot go on doubling the monetary base, without eventually stoking
inflation expectations, pushing up long-term interest rates and
eventually eroding their very viability as sovereign borrowers. Not
even the U.S. can do that.

The fiscal implications of the current
policy package are particularly serious. For the time being, fiscal
policy has been put at the service of survival, but the current price
of survival is that net public debt is going to double as a share of
GDP between 2008 and 2014. Even using the very optimistic forecasts of
the Congressional Budget Office,
which anticipate growth of around 4% over the next few years, the net
debt burden will rise from 40% of GDP to 80%–that’s an increase in the
debt stock of about $9 trillion. The interest charge alone on that
increased debt will be in the region of $300 billion to $400 billion a
year, which in turn may mean more borrowing to pay the interest if
primary deficits are not reduced. When governments reach the point
where they are borrowing to pay the interest on their borrowing they
are coming dangerously close to running a sovereign Ponzi scheme.

Ponzi
schemes have a way of ending unhappily. To get out of the Ponzi trap,
governments will have to raise taxes, or cut spending, or monetize the
debt–or most likely do some combination of all three.

Monetization is already happening. This is where a government
effectively prints money by allowing the central bank to create base
money that is used to buy government debt, thereby increasing liquidity
and holding down long-term interest rates (because the additional
demand for these securities pushes up bond prices, thereby lowering the
real interest rate the securities pay, as well as putting money into the pockets of the investors who have sold the securities).

Over
time, monetization is inflationary, but the inflationary effect is
insidious because it is not immediately visible. In the short run
deflation will outplay inflation. In most developed countries today
there is so much slack in economies, with weak demand and high
unemployment, that prices cannot rise. The velocity of money is also
weak, as financial institutions are receiving liquidity from central
banks and hoarding it to rebuild their balance sheets, instead of
lending it out. But as the economy recovers, these effects will abate,
and the growth of the monetary base caused by monetization will
eventually drive expected and actual inflation. And once markets start
to anticipate that scenario, it may already be too late to avert an
inflationary surge.