2001 Mercury Sable My car won't Move

I recently bought a used Sable. The other day I was stopped at a red light, and about 3 seconds after I took off from the light, my car jerked and refused to move any further. It was still running, and will move into gear, but when I press the gas pedal, the engine just revs. I had it towed to the shop and the mechanic said it is the pump or the torque converter, but that he can't be sure until he opens the transmission. The transmission had plenty of clean fluid (red and not burned) and doesn't leak. I have been quoted $1600 to put a used transmission in the car. When I asked about just flushing the transmission to see if it would fix the problem, the mechanic said it was a waste of time and that he wouldn't bother. I left the car there, feeling helpless, since I am a woman and feel like I may be getting ripped off, but need my car to run. What do you think is wrong with the car and what steps should I step to repair it in the most economical way?