Venkat Rao has an interesting piece on this topic which he calls The Locust Economy: http://www.ribbonfarm.com/2013/04/03/the-locust-economy/
The question he asks is: We're feeding on this excess supply until it's all gone--then what? For instance, regarding your point (2), to live in NYC will it become necessary for everyone to become a part-time landlord to make rent as rents escalate?