The failure mode is one most economists ignore, but was the key for the few who predicted the GFC - private debt. In Australia we have some of the largest private/household debt in the world. There tends to be a point where it becomes unsustainable, and the creation of debt (credit) starts to slow. What was observed elsewhere in the world was that if it slows down and goes negative (that is, the private sector of the economy starts deleveraging), unemployment tends to start to rise. (This is in line with some non-mainstream theories that beleive credit is a major driver of demand in the economy. Mainstream (neoclassical) economic models ignore debt because they assume that it's just a transfer of funds from a more patient person to a less patient person, but that's not actually how modern banks work).

If unemployment rises, people start to not be able to pay their debts. The default rate rises, banks sell up properties, and the prices tumble.

Recently we were reassured by the Government that the private debt level wasn't a problem because the assets (mostly housing) is very valuable and rising, but I saw a quote from the US in 2005 or 2006 saying exactly the same thing...