Not enough money to go around

Continuing with outsourced economic commentary:

A Congressional Bonus
Because a $787 billion bonus doesn't cover everything.
Wall Street Journal editorial, Feb. 26, p. A12

Fresh from passing its $787 billion stimulus, and then attending President Obama's "fiscal responsibility summit," the House yesterday approved a bonus hike in the 2009 budget for most domestic agencies of . . . 8%.

The vote on this "omnibus" bill gives federal programs an extra $32 billion to spend for the seven months left in this fiscal year. And because these increases get added to the spending baseline in setting future budgets, Congress is adding an estimated $108 billion more in outlays over 10 years.
…
There's another reason Congress wants to pass this omnibus: about 9,000 earmarks. Last year's continuing resolution didn't let Congress pass out cash for the very kind of parochial projects that House Speaker Nancy Pelosi had said she was going to rein in. This bill opens that door. Federal spending as a share of GDP is heading toward 28% -- by far the highest level since World War II.

And this:

The 2% Illusion
Take everything they earn, and it still won't be enough.
Wall Street Journal editorial, Feb. 26, p. A12
…
But let's not stop at a 42% top rate; as a thought experiment, let's go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.

Fast forward to this year (and 2010) when the Wall Street meltdown and recession are going to mean far few taxpayers earning more than $500,000. Profits are plunging, businesses are cutting or eliminating dividends, hedge funds are rolling up, and, most of all, capital nationwide is on strike. Raising taxes now will thus yield far less revenue than it would have in 2006.