I didn't read your entire comment, but as for personal financial decisions ruining the economy, I don't think this would happen in a free/more free market economy where the idea of market failure was allowed to take place. Federal bailouts are what expand bubbles and cause them to be worse later. If a bank knew for sure it would fail if it took on such risky loans, rather than just being bought out by a larger bank or paid off by the government, they would probably choose a more rational lending policy.
The only ration lending policy -- on an individual level -- is to discount any systemic risk you create by 100% minus how much of the system you make up. If everyone else does this, systemic risk is ballooned and it doesn't matter if you do it or not, you are still going to fail. If no one does this, it is imperative to you do it--after all, someone else is eating ~90% of the costs and you are getting the benefits.
