Just so we're clear.  The Fed "bailed out" wall street by loaning them funds or buying up equity.  It didn't just give free money to the troubled companies.  We're all still in the same boat floating on the confidence in the US dollar.  Wall street still has to make good on their bail out debt to work our way out of this- and at the rate that its happening it very well could turn a profit for the Fed.  The Fed recently decided to reinvest that profit in the economy, but when the economy gets on its own legs, those profits will go to the treasury and pay off the government debt.  Certainly this will be a painful slow process, but we're no where near a doomsday scenario of internal default.  The only real risk I see is the one hugolp brings up- that other nations may default (PIIGS), which would strain the markets and increase the credit crunch here in the US.