And considering that our government uses static models in predicting effects of tax law changes because dynamic models are too risky evne though there is plenty of data to allow its use...RobFromGa, here is a link to a version of the Dale Jorgenson & Peter Wilcoxen paper Boortz mentions as the source (his book is very poorly sourced) for the supposed price drop. You can review it for yourself and determine how reasonable you think it is. Although it's not mentioned in the article, in the calculations for the model, the cost of labor goes down as the personal income & payroll taxes go down. That should tell you something about what's happening to wages in their model.
Thanks for the links, I'll check them out. I agree that the Boortz/Linder book is very poorly referenced. Michael Crighton did a better job in his book State of Fear, and that was fiction.
I am learning a lot from the information on this thread.
I think it is important that the FairTax crowd recognize that they have the burden of proof in this case to sell their plan and answer all valid questions.
They are the ones who want to radically change our system, and they could be right about this plan, but it is the height of arrogance for them to expect everyone should roll over and accept this on faith. John Linder is a good man, so they have that going for them.
"Notice how their model has the labor supply increasing 30% the first year. I don't know about you, but that doesn't seem that reasonable to me."
The reason that it doesn't seem reasonable to YN is that he dismisses outsourcing as a part of the labor supply. With outsourcing, the labor supply is, for all practical purposes, unlimited. Of course, that doesn't suit his agenda, so he just says "outsourcing isn't part of the labor supply". He never bothered to offer a source for that counterintuitive assertion. It is that way because YN says it is. This is one of many reasons that I adopted the tag line that you see below.
You will appreciate the irony that YN, who offers the criticism of Boortz's book not being well sourced, doesn't bother to source that opinion. Of course, when you are YN, you don't need stinkin' sources. You make a statement and everyone is supposed to accept it as the law of the land.
I have consistently rejected that position and will continue to do so.
Is that the one I asked you to translate into plain english but you never did?
Doesn't the cost of labor go down because productivity goes up, since people aren't working as slaves anymore?