Step 13 to step 14 is a non sequitur. It does not follow from forever increasing prices or unemployment that everything will fall apart. For example, they could be forever increasing but the infinite series converge on a well-defined limit of 8% unemployment.

To show that unemployment or whatever will increase to an arbitrary level, or even a particular level, you need to do a lot more heavy analysis. And I say heavy, because there are a ton of feedback loops at every step in your argument, none of which may change the sign of the results, but which strongly affect the magnitude, which is what is now the question.

(Or to put it another way, you may have shown there is a problem - that the sign is negative - but you have yet to show that it is not a small problem which may essentially solve itself or be acceptable collateral damage while we work on more important things - that the magnitude is greater than a certain point we care about.)