Overleverage in the markets

I hear a lot about over borrowing to play the stocks, and general high leverage. What is meant is that many brokers and individuals do not have ready cash available to pay debts, they assume money will come from sales gains in assets. But, if we crash what's the worst that can happen to growth? We back down to 1.6%, where we were a few months ago. Hardly a catastrophe. There may be some bankruptcies in Illinois and California. Unless DC goes belly up.