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And then the whole thing crashes when the Democrats and free spending Republicans realize that they still need the income tax after all, in addition fair tax.

That wouldn't happen considering FairTax legislation does three things that effectively dismantle the income tax: (1) it abolishes the IRS, (2) it repeals all statutory language having to do with taxing income and payroll (i.e., the Internal Revenue Code), and (3) it eliminates the filing of annual income tax returns to the federal government for over 140 million Americans. Fair Tax FAQ #50.

When the economy slows, they raise the fair tax to pay for socialized medicine and universal preschool.

Attempting to raise The Fair Tax would backfire. The transparency of The Fair Tax due to the rate printed on every bill of sale would make every taxpayer immediately aware of such ans attempt as opposed to the income tax and all its exemptions, loopholes and hidden taxes. More importantly raising the rate too high will discourage people to spend. Consequently Congress would collect less tax to fund the federal government and force them to lower their spending. Founding Father and first Secretary Of The Treasury Alexander Hamilton raise this point in his Federalist Paper #21:

"It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without defeating the end proposed-that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty that, "in political arithmetic, two and two do not always make four." If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them. "