Hank and Ben will pass the buck on to the next generation. You have to remember that inflation's effects on the capital markets take time.
We're feeling it right now on the consumer level for sure. But there's a huge disconnect b/t capital market inflation and consumer inflation.
In other countries there would be no difference. But the USA is unique in that we have to deflate the asset bubbles first - bubbles in housing, equities, futures, credit markets, etc. This was caused by our unique status as the #1 consumer economic engine.
I argue that this round of asset deflation is giving the treasury/fed another clip of ammo for more bailouts. You can rest assured there will be a WAMU or Lehman Bros. bailout by this weekend.
Conclusion: The Fed/Treasury WANT inflation...long term. But right now, they are taking advantage of deflation to re-load. As for the consequences on the nation's balance sheet, they will either be dead or long gone by then.