What's gonna happen now?

Question

Now that the fed bailed out the financial institutions, what will happen if everyone decides that taking home loans and credit in any way is not the best option anymore.

Answer 1

if everyone stopped borrowing tomorrow, this would hurt the economy badly. but people won't do that. so don't worry.

now, if people gradually became debt free and stopped borrowing over a period of the next 30 years.... that could be good, although banks and other lenders would suffer.

do I see tears anywhere?

Answer 2

The markets will be hurt but adjust over time.