Our grandparents learned first hand what it was like to lose everything. For that lesson, they saved, paid cash, and didn't go into debt except for a house. And part of the time, not for that.
It would be a long, hard, deep recession. No doubt about it. That being said, it is time. We have lived on bad paper for too many years, and this "immediate gratification" mentality that everyone in this nation (me included) seems to have needs to be tempered with the reality that the money has to come from somewhere.
The longer we let China and Japan own us, the worse off we are going to be. Let them fail, let the banks fail, let the whole system collapse. It is a lesson we are due.