Cain's simplified tax plan got me thinking about how the government deals with serious economic times (such as right now).

 

Let's look at the basics of Cain's plan as a super-simplified version of all tax plans. For local, state and federal governments, there are: corporate income taxes, personal income taxes, and sales taxes (as well as real estate taxes and so on).

 

• In a healthy economy, money flows and there's enough of the *income* and *sales* taxes to fund the government and it's many programs.
  
• In an unhealthy economy, the money flows more slowly, and (for sake of argument) there's not enough of the income and sales taxes to fund the government etc.
  

So then, from what taxes or other monetary sources do (or could) the governments draw funds, not only to maintain the governments' status quo during slow economic times, but also to kick start the economy in serious situations?

 

(A technical parallel would be having a car engine running off the alternator, but not having a battery to restart the engine if it stalls.)

-print $$

-borrow $$

-use reserve $$

or, what I would like -- it could just SHRINK!!!

Bad economies have never really kept the govt. from spending money on wars, or medicare, or whatever. The govt. has run up what is essentially a credit card to the extent of about ten trillion dollars over the years to cover the budget deficits, or shortfalls.