In my current project fantasy/horror project, for complicated reasons relating to a bunch of gods killing and eating each other, various aspects of reality have begun to go wrong. One of these is that, because the old god of dreams died, there are no good dreams anymore. People don't dream as often as they used to, and when they do, they have only nightmares, ranging from mildly unpleasant to horrific acid-trip night-terrors.

Very young children never dream at all, with the 'First Nightmare', an event of varying cultural significance, occurring potentially anywhere between five and ten years of age.

First, if this happened suddenly, how would people, individually or as a society, react to it? Obviously, a lot of people are going to slowly go crazy, and a whole lot more are going to be sane but miserable at first, but any specifics? How long until people start 'acclimating' to this, assuming they even can?

Second, if this has been the status quo for a few generations, how would society work around this? What kind of knock-on effect would this have on art, science, ect? I have done some work on this, but I am sure this would have such far ranging consequences, that I want as much input.