The Armey/Shelby Flat Tax, does not tax the earnings on those investment vehicles as such gains are all exempted.
Neither does the FairTax.
Ahh, but the FairTax visibly taxes consumption providing the demonstrated disincentives to spending and incentive to save/invest above, where the Armey/Shelby Flat Tax does not visibly tax consumption generating opposite results on investment and consumption.
The consequence according to Jorgenson...
No, that would be the consequence according to ancient_geezer.
Jorgenson 1997: "2.Taxation of consumption would induce a radical shift in the composition of economic activity-away from consumption toward investment."
Your implication that our declining savings rage is due to "consumption gone wild" doesn't square with the data.
"Too much consum'n go'n on" it looks to me and squares with the data fine:
Ahh, but the FairTax visibly taxes consumption...Where does Jorgenson (or any other economist) make the the claim that visibility is the disincentive?
You keep claiming that purchasing power goes up, and prices are at least neutral. If that is the case, the tax itself, at a minimum, has a positive effect on consumption: goods cost relatively less even with the tax; that's hardly a disincentive to consume. (Again, I don't buy the assertion about neutral price behavior, but you are arguing out of both sides of your mouth on that one.) You seem to be claiming that people will eat less, drive less, buy fewer new houses and cars and clothes ... all because the tax is too high ... even though these items are more affordable. That's silly.
"Too much consum'n go'n on" it looks to me and squares with the data fine ...
As usual, when presented with data that does fit your perception of the world, you ignore it. You've got a graph that you like, but you apparently haven't bothered to investigate what's behind the graph (I notice this time you left out the small print)
To recap: the increase in consumption is attributable to an aging population consuming increased levels of medical care and personal business services. The decline in the savings rate is do to three things: the increased consumption noted above, an again population transitioning from accumulating assests to consuming assets; and adding a third component, the failure of the data on savings rate to take into account capital gains (either realized or unrealized.) The "savings rate" as currently calculated, is not a very good indicator of wealth or capital formation.
But I notice you completely ignored that data.