"... the value of all government transfers ... would be reduced by the amount of the FairTax ..."
And here we see you say:
"nominal federal transfers must be increased by the price increase caused by adding the FairTax to consumer prices. In other words, the value of federal transfers are reduced by the amount of the FairTax, so you have to increase the nominal amount of the transfer to keep the same real value."
So let's see - you say that ALL federal transfers must be reduced but that federal transfers must be increased... HMMM! - Seems like a disconnect there somewhere since you've shot yourself in the foot by contradicting in one part what you said in another.
But, hey, we're used to that from you folks. Let's see ... increasing the transfers by the amount of the Fairtax is different from increasing the transfers by the amount of the FairTax. Suuuuurrrre!! it is!
I didn't misunderstand Kotlikoff at all. And BTW the equation you post does nothing to "confirm" you outlandish statement at all. The alpha term can be zero in which case there is no indexing at all but in any event your claim of "all government transfers being reduced" is wishful thinking on your part.
So let's see - you say that ALL federal transfers must be reduced but that federal transfers must be increased... HMMM!No. I said "the value of all government transfers, including the FairTax prebate, would be reduced by the amount of the FairTax" thus "you have to increase the nominal amount of the transfer to keep the same real value."
Seems like a disconnect there somewhere since you've shot yourself in the foot by contradicting in one part what you said in another.There is no disconnect. You just don't comprehend what I'm saying.
The alpha term can be zero in which case there is no indexing at all but in any event your claim of "all government transfers being reduced" is wishful thinking on your part.Oy! It's obvious this is way beyond your capabilities. You have not comprehension of "real" values.