Like you I have lived through this scenario a few times before.
The next move will be an increase in wages, whether that be driven by a change of gov't (labor), or just through skill demand shortage, don't forget the millions of retiring baby boomers will have to be replaced. This will keep the economy ticking along even though consumers may feel poorer due to declining asset prices.
In the early 90's although consumers, like me, did cut back on spending they were more selective about purchases and that introduced the buy now, pay later plans. But I still had to feed a family, replace broken house items, and limit holiday expenses but that didn't bring the economy to a grinding halt. I did however concentrate on reducing my debt, and that will happen this time leading to the next expansion phase, it may take a few years though.
I find it somewhat ironic when people say they can't make ends meet when there is $billions spent on alcohol, smoking and gambling, maybe people will have to temper these habits which would be a good thing by reducing our health care costs.
People have had it so good for so long that any interruption to their standard of living becomes the end of the world, for them. But life will go on.
