There is quite a difference between guilt and moral shame. Moral shame has a certain amount of truthfulness tied into it with the investigation into Cause and Effect. We see we may have done unskillful things in the past. We acknowledge responsibility for our actions, speech and thoughts, but when we go into excessive guilt or self-hatred, it's gone too far. We have to acknowledge our capacity to change and develop our understanding of this Cause and Effect; feel compassion for the person we were, who may have made these mistakes through ignorance, acknowledging the power of ignorance in the human mind; and then make a determination.
By making a determination to try and avoid the same thing again, we don't have to freeze that person in that moment of time. Basically, when we're getting into guilt, self-recrimination and neurotic self-hatred, we've frozen that person in that moment of time and we don't acknowledge the changing nature of the self. I like to use an analogy of the self as a flowing river. The Mississippi River exists, right? It's right there on the map. It's in the United States. But if we go up to the side of the Mississippi River and look at one spot, is it the same water going by? It's never the same water, but the concept "Mississippi River" remains the same. In ourselves, we don't want to freeze ourselves into an idea of ourselves that is not flowing and changing.
Moral Shame and Moral Dread are called the Lokapala Dhamma - the two virtues that protect the world. What do they protect the world from? From unskillful actions. Moral shame ties in with moral dread in a way that we fear to do the same sort of things in the future, because we're going to get negative results.
If we go the next step and have Compassion for who we'll become, then we get away from the immobilizing fear to doing something about it. Having Compassion for ourselves, we control ourselves; we develop mindfulness of our actions, speech and thoughts, so that we can be careful about the results we are going to have to receive. We are receiving the results of our past actions in the present, through our memory of our unskillful actions.
The mind does not forget, and so we're having to receive all the results because the person we were didn't have enough Compassion for the person we are now. In the same way, we have Compassion for who we are going to become by being careful of our actions, speech and thoughts. Looking into the past helps us develop the wisdom to know what actions, speech and thoughts brought suffering for ourselves and others, and we each try to learn from our mistakes. Guilt, the sense that we are sinners and will remain so forever, is not part of Buddhism, but we do have responsibility for our actions. We can't get away from the responsibility of our Kamma.