An old saying has it that if you owe a bank $1 million you're in trouble, while if you owe the bank $100 million the bank is in trouble.

We're now learning that if the bank owes somebody $10 billion we're all in trouble.

America's taxpayers are already on the hook for $700 billion in bailout money for our troubled financial institutions, and that figure seems certain to rise. The investment bank Goldman Sachs estimated this week that banks eligible for bailout money could be holding as much as $5 trillion (that's five million millions) in "troubled" assets.

And of course an ironclad law of government bailouts is that such things help create troubled assets even where none were evident before, as everyone tries to get a piece of the action.

That dour news comes on the heels of the announcement that Wall Street bankers handed themselves nearly $20 billion in bonuses last year. (A cynic might note that if successfully shaking down the government for $700 billion to cover some of your losses doesn't merit a performance bonus, then nothing does.)

All this reminds me of possibly the most obnoxious feature of the 2005 bankruptcy reforms, so-called, that made it much harder for ordinary Americans to liquidate their debts and get a fresh start.

The new laws require everyone who wants to file for bankruptcy to pay for the privilege of receiving "credit counseling" before they file. As the Federal Trade Commission explains, "a pre-bankruptcy counseling session with an approved credit counseling organization should include an evaluation of your personal financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan."

But that's not all. After you've been counseled on the advisability of avoiding future situations in which you have lots of debt and not enough money, and you've received the required certificate to this effect, you still have to undergo "post-filing debtor education."

According to the FTC, "a debtor education course by an approved provider should include information on developing a budget, managing money, using credit wisely and other resources."

The counseling and education requirements are, as a practical matter, little more than a government-mandated boondoggle for a few private companies (in 2008, more than half of the million-plus mandatory counseling sessions were handled by just three firms).

In 2007, the Government Accountability Office tried to evaluate whether these counseling and education requirements were accomplishing anything, and concluded that "the value of the counseling requirement is not clear. The counseling was intended to help consumers make informed choices about bankruptcy and its alternatives. Yet anecdotal evidence suggests that by the time most clients receive the counseling, their financial situations are dire, leaving them with no viable alternative to bankruptcy. As a result, the requirement may often serve more as an administrative obstacle than as a timely presentation of meaningful options."

But this overlooks the symbolic work these otherwise farcical "counseling" and "education" sessions - they generally last less than an hour - are accomplishing, which is to humiliate those required to undergo them.

And that, indeed, is the whole idea. You might think you went bankrupt because you lost your job and therefore your health insurance, and you now you have a mountain of medical bills you can't pay (a prime factor in around 70 percent of all individual bankruptcy filings), but the real reason is because you don't know how to develop a budget and manage money wisely.

Maybe it's necessary to hand over hundreds of billions of tax dollars to the Masters of the Universe, so they can clean up the mess they created, even as they continue to pay themselves tens of billions of dollars for a job well done.

But can't we at least make them take a course or two on managing money and sticking to a budget?

Paul Campos is a professor of law at the University of Colorado. He can be reached at paul.campos@colorado.edu.