This is all true, but the massive debt crisis that we're heading towards won't necessarily happen.
Major economic decisions that clearly look like stupid blunders that will lead to disaster are made all the time, and are "normal".
It takes time for the consequences to manifest. It starts an oscillation, like jerking a long rope that's tied to a tree at the other end. The disastrous consequences will occur when the wave reflects off the tree and arrives back at your end of the rope.
The solution is to change the system while the wave is still in motion. Doom is coming, but the way that financial effects spread will change, and the doom will be averted, with a change in the rules of bankruptcy / mortages / tax / interest.
Doomsaysers will see what has happened, and talk about kicking the can down the road. That's one way to look at it, but kicking a can forever isn't so bad if you can extract some economic benefit from it each time.