ALL of the economic models related to the FairTax show that consumption, in a worse-case scenario, wouldn't drop by more than 1 or 2 percent. In fact, many of the modeling shows a slight increase in consumption. After all, money is worthless if it can't buy anything. Here's a good example of how it works:
Step 1: You invest in a factory to buy new equipment.
Step 2: That factory is now more productive and making more money.
Step 3: The factory can do one of three things with the increased profits: (1) wages are increased, or (2) dividends to shareholders are increased, it is (3)reinvested. Option three simply repeats the cycle, putting the process in an upward spiral pf profitability. Options 1 and 2 both put money ion pockets of consumers
Step 4: the worker/shareholder with more money can either (1) invest it, or (2) spend it. If it's invested, more money WILL come out the other end again.
This is basic supply-side economics in a nutshell.
And yet we're stuck with the same monstrosity of government bureaucracy.
The tax plan would work, I believe. But that doesn't solve the whole problem, only half.