[thetrumanshow]

4% sounds optimistic, but its good to have a canvas to paint on.

Potential bad effects from the top of my noggin:

* You've compressed the compounding growth in prices (inflation) by two years in one stroke.

* You've instantly decreased the buying power of a lot of people; worst affected are those not affected by the bump (recipients of disability, recipients of social security)

* Fun addenda: You've set the precedent for a 100% bump from the current federal rate, and its more likely to happen again, once more compressing the inflation timeline and further pressuring people that don't work a waged job.

Oh, and the reason putting pressure on inflation like this is bad is that it discourages investment, which leads to weakened economies.

[jimmaswell]

It's just an example with extreme numbers to show how the math works. Gradual phase-ins over many years are how it's done in practice.