I was addressing the instant inflation of the FT which would be big economic news. You are the only "economist" making that assertion. If a bill proposed in congress would cause instant inflation of 18 - 25 - or 30 %, all of which you have claimed, there would be an instant outcry from such folks as Ben Bernanke, Alan Greenspan and even William Gale. All I'm asking is how you know so much more about the economic effect than they do? Or do you have an economic paper from some archive somewhere showing the effect of the FT on purchasing power?
Gee, the only ones paying for papers on the effect of the fairtax is AFFT. No one else takes it seriously enough.
What do you think will happen to the PRICE of a gallon of milk under the FairTax. Or a car?
I say that the shelf price (pre-tax) might drop as much as 8%, making a $10 item cost $9.20. Then if the rate was only 29.87% as you all promise, the tax would be $2.75 and the total out-the-door price would be $11.95. That is 19.5% higher than it is today under the income tax.
If I had a bunch of after tax dollars and I was planning to buy a retirement home, then this same 19.5% price increase would cause me to need 19.5% more dollars to have saved up in order to buy it.
I call that instant inflation, you can call it something else if you want. The saved dollars are worth less.
Of course all the wage earning people will have more dollars because they are promised their entire paychecks. They will have more dollars and things will cost more. Prices and wages have both been inflated for the wage earner.