America’s housing meltdown has spawned an epidemic of home foreclosures and job losses. It has dealt huge hits to the bottom lines of big homebuilders and Wall Street banks. It has sent the stock market into a frightening tailspin. It’s triggering fears of a recession and sending shock waves to financial markets around the world.

In the United States, the victims range from shell-shocked homebuyers unable to keep up ballooning subprime mortgage payments to middle-class investors seeing their 401(k) value plummet.

Most of this pain could have been avoided had it not been for greed, imprudence and sloppiness on the part of everyone from homebuyers to mortgage lenders.

Some damage control is occurring. Mortgage service companies have helped hundreds of thousands of homebuyers with subprime loans by modifying mortgages and setting up repayment plans. Congress is considering sorely needed legislation to help prevent future mortgage abuses, and a general economic stimulus package is planned to juice the economy. The Federal Reserve Board has ratcheted down interest rates, which could encourage refinancing of mortgages and the sale of many homes awaiting a buyer.

A massive government bailout targeted directly at the housing industry and beleaguered homeowners would be inappropriate, however.

Reckless homebuyers, mortgage lenders, real estate speculators and Wall Street investors who took risks and got burned must, as a general rule, suck it up and move on. American taxpayers shouldn’t have to pay for their mistakes, which often resulted from greed, dishonesty, wishful thinking and throwing caution to the wind.

There were the homebuyers, for example, who lied about their income to qualify for loans. Many homebuyers foolishly entered into subprime loans with low “teaser” interest rates that are now resetting at higher levels and raising monthly payments by hundreds of dollars.

Then there were the greedy, sloppy lenders who issued loans they never should have and who in some cases didn’t even bother to document the buyer’s income (the infamous “no-doc” loans).

There were the big Wall Street banks that purchased subprime loans, packaged them into mortgage-backed securities and sold them to investors such as pension and hedge funds. Authorities in New York and Connecticut are investigating whether the banks failed to disclose sufficient information about the risk of loan defaults.

There were the real estate speculators whose capacity for wishful thinking was boundless. They worked on the theory that home prices would keep rising forever, even after home prices in California routinely began topping $400,000.

Some Americans were skeptical long before the housing collapse. They would, for example, hear about a young couple of modest means buying a $200,000 home and wonder how on earth they could afford it. Some people without steady jobs and a respectable credit rating somehow qualified for a mortgage.

In short, lending practices got far too loosey-goosey. The next time there’s a housing boom, such laxity shouldn’t be allowed, lest we want an inevitable housing bust to follow.

A young couple should wait to buy a home if the only choice is to take out an ultra-risky subprime loan. And if you’re a lender, how could you sleep at night knowing that you had made such a potentially problematic loan to someone blinded by the prospect of realizing the American dream?

The negative impact of the housing meltdown probably will total trillions of dollars when you take into account everything from tumbling home values to falling stock prices.

Will we learn from this? How on earth could we not?