"To accommodate the FairTax’s insulation of the real purchasing power of Social Security benefits, we raise the size of these benefits by 30 percent, which is the FairTax retail sales tax rate. In implementing the FairTax we also impose an 18 percent permanent cut in government purchases of goods and services starting in our 2004 base year. This may seem like a substantial reduction in discretionary federal spending, but one needs to bear in mind that such spending has increased by 22.2 percent since 2000 measured as a share of national income."And what additional text did you post that added to the point? None.
While we're at it, let's also look at some of the other "tidbits" in the paper (where the term "welfare" is used to mean economic well being), to wit:Yeah, if we could get the government to cut it's spending 18% I would imagine there would be good for the economy. So which of Kotlikoff's results are due to the FairTax and which are due to cutting government spending 18%. We can't know unless he reruns his simulations with the FairTax being truly revenue neutral.
Doesn't matter - both are due to having the FairTax.