2011: Whither Policy?

As we enter the season of prognostication the mood in US financial markets is bullish, the main street numbers (unemployment) remain bearish, and the US political establishment is decidedly undecided.  The central political comprise is an agreement to "kick the can down the road" -- with the responsibility squarely resting on the 2012 electorate. Unfortunately price signals -- arguably the most critical benefit of market economies -- have been severely compromised by the various "bailout" programs of the last couple years.

Will the Fed continue with its (almost) stated intent to manipulate interest rates, asset prices, etc?
Will the global financial regulators continue to bailout senior creditors at the cost of tax payors?
Will political bodies show any appetite for making choices and trade-offs on citizen services/entitlements, tax policy, etc to achieve some degree of sustainability in the medium term?

The bi-partisan Simpson and Bowles commission recommended policy measures that would require all of the above to be addressed -- and perhaps therefore have been largely ignored since their release. The central policy question now is a political one, more than an economic one. I look forward to seeing your thoughts on which direction US economic policy will take in 2011...