The centre cannot hold.

I'm reminded of Yeat's famous poem here.

There is talk of bailouts for homeowners who can't make their mortgage payments. The question is never asked why, after a while, anyone would continue to pay mortgage payments if a few could simply claim 'hardship', to get out of them. After a while, as the economy worsens, it will be hard to find anyone who will keep up with their mortgage, and then credit card payments and some taxes will be ignored. Then the Banks and perhaps some levels of Government will find out what it means when their requests for payments become 'discretionary'. Even without the moral hazard of a Federal Bailout, if people have to choose between food and taxes, or food and their house payment, guess which goes?

Rental properties could also suffer, as renters lose jobs, are evicted, and dispossessed homeowners can't fill the appearing vacancies because their credit score is now so bad. At job losses approaching 1 million a month, 18 months of this could bring this about. Current national rental vacancies are about 10%, highest since before the 1960's.

So many apartment complexes could go bankrupt as well, and no bank will want to pick up these properties because they are no longer profitable. Who will the remaining renters pay their rent to? O.K., the banks, but it could be a loser for them. I don't know. And I suppose quite a few people will be living in their cars. Local city governments will also lose tax revenue from failures in the rental market, just like the loss in property taxes from dispossessed homeowners.

I won't even mention the lost tax revenues from failed commercial properties as 50+ retail chains have disappeared.

So where will all the money come from to maintain the local roads and water supplies, and police and fire protection, if local tax revenues fall hard? If most of the banks fail as well, as people 'forget' to make payments to them,the velocity of money will approach zero.

This could be when we'll all find out, what systemic collapse feels like.

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Yeats, 1920