[RobFromGa]

No the savings will exist in every stage, and percolate through to the next stage as a percentage of their cost at the next stage. If we assume that labor savings are 7% due to the elimination of Employer-half SS/M and we start at the lowest level and determine that the best case savings for a company that is all labor is 9%, then that is the most savings that we will see on any component of cost.

If you have ten components of cost and the most that any of them are reduced is 10%, then you are going to have less than a 10% reduction in your total cost.

To argue against this, you would need to come up with a hypothetical company that can save more 22-23% at ANY level of production, without assuming inputs that are dropping by unrealistic amounts.

[Principled]

If you have ten components of cost and the most that any of them are reduced is 10%, then you are going to have less than a 10% reduction in your total cost.

This does not model the nrst. It's not what we're talking about. In the nrst, each stage affects the future stage and so on.