Goldman Sachs (GS) is bullish, long term, on the North American car business. Coupled with Ford's (F) earnings announcement today, this may represent some light at the end of a fairly long tunnel. But is it really benign light, or the kind of light that sears the eyeballs and leads to blindness?

Ford is burning through significantly less cash than it did at the tail end of last year and seems to have enough in reserve to stay afloat through 2009 without seeking federal assistance. CEO Alan Mulally now looks like some kind of mad prophetic business genius for mortgaging the company to the credit markets, back when there was a credit market. Optimism has taken hold: Ford thinks it can hit the break-even mark by 2011.

Goldman anticipates that the auto market will be able to move 14 million vehicles by 2012, a mere three years from now. Given that the market has been hammered down to something more like 9 million, Goldman is expressing a fair amount of cheer. It's anticipating the passage of a "cash for clunkers" program in Congress, which will juke the 2009 market to the tune of, potentially, 1 million new cars. But 14 million total in just three years? In order to achieve that level, not only would Ford need to be running at or near full capacity, but so would GM, whatever remains of Chrysler, plus the Japanese, Germans, and Koreans. And the trade-in program might have to become a permanent fixture.

By 2014, there may also be half a dozen niche players on the scene, from Tesla Motors to a number of other small startups harvesting whatever green goodwill the Department of Energy can manage. And let's not forget the Indians—Tata Motors has indicated that it may develop a U.S. version of its ultracheap Nano—and the Chinese, who would very much like to become an auto-exporting power. Goldman's prediction calls for a very robust market, with credit flowing freely. The problem is that 14 million by 2012 could easily lead to yet another iteration of the excess-capacity problem that has plagued the auto industry for years and hammered down profits for Detroit. An overly large car market is also a vulnerable car market, and there's good reason to be slightly enraged by projections like this, because they work backward from automaker profitability rather than what's best for the consumer, and the country.

So hooray for Goldman's optimism—they've advised investors to buy Ford stock!—but beware the blowback.