Employees of Lehman Brothers awoke Monday to word that, overnight, their company had filed for bankruptcy. The half of all Americans who have stakes in the stock market worried whether the fire sale of Merrill Lynch had implications for them. Folks with no cares about capital markets? They still had to cope with dramatic news and wonder if it would, by extension, affect their jobs.

A Vesuvian eruption of market news brought real pain to some households and real fear to many others. Americans who've endured drops in home values and retirement accounts watched helplessly Monday as the Dow Jones industrials fell 4.4 percent.

There's no reason to think that still more familiar financial firms won't pay a terrible price for helping America get so drunk on debt. So if Monday's news rattled you, consider switching to coffee — decaf, definitely decaf — for the next few months as the current hangover continues to play out.

Which it will. Our hunch is that some of the current stark devaluing of loan portfolios and asset-backed securities is at least a little over the top. But in selling panics as in hurricanes, some people are content just to live to see another day. Once capital markets reprice the true value of those instruments, and holders of lousy debt admit as much, disruptions like Monday's will subside.

The good news Monday was very good: Federal authorities who had forced the sale of an all-but-bankrupt Bear Stearns to J.P. Morgan Chase and who had rescued mortgage giants Fannie Mae and Freddie Mac didn't stick U.S. taxpayers with the tab for what's ailing Lehman, Merrill Lynch or troubled insurer AIG. The feds are letting the bulk of the consequences fall where they should: on those companies and their stockholders, who had taken the risks of ownership. Main Street customers and account holders should feel few if any repercussions (beyond, of course, Monday's scare).

Bear Stearns, Fannie and Freddie had grown too big for Washington to let fail — the latter two because Washington itself had, over the decades, given them too much protection from market forces. But the sooner executives of other companies realize that taxpayers won't save them from their bad decisions, the better. Example: Automakers hoping that taxpayers will rescue them from their prior overreliance on gas guzzlers now have little reason to think that an administration willing to let Lehman Brothers go bankrupt wants to ship gazillions of taxpayer dollars to Detroit.

So be at least a little happy. The Wall Street Journal reported Monday that Treasury Secretary Henry Paulson was under pressure last week from Wall Street CEOs who argued that the government needed to do for Lehman Brothers what it had done for Bear Stearns. The Journal said Paulson refused — in part because he was irked that Wall Street saw him as someone who always would ride to the rescue. Good for Paulson.

The other day, the headline of a Chicago Tribune editorial urged the Bush administration to "Bail out of future bailouts." The key passage: "It's reckless to let Washington provide implicit support to private companies. Once this deal (Fannie and Freddie) has worked itself out, the government needs to make an orderly withdrawal from the business of mortgage lending."

That's heresy to those who believe, for example, that it's more important for every American to own a home than for him or her to have the certifiable ability to gradually pay for it. The bursting of the housing bubble spatters us all: Qualifying for a mortgage or other loan now will mean proving we're borrowing within our means to repay. We'll all see fewer TV ads for "no-documentation" and other gimmicky lending schemes—occasionally smart options, but usually geared to consumers living beyond their means.

Of course, if so many loan outfits hadn't made money so ridiculously easy to buy — because that's what borrowing really is: buying today's money with tomorrow's income — our capital markets would be healthier today. And many Americans wouldn't be staring down the barrel at so much debt.

What happened Monday was shocking, yes. But if there was a real surprise, it was that the feds didn't buckle to pressure from Wall Street.

Instead, your government did the right thing. It listened to Wall Street's cries for a bailout. Then it sent a message of tough love from American taxpayers.