If the deficit continues to rise, the government will have to pay higher rates of interest which will add to the deficit problem and will bring on inflation. Since neither political party has been successful at controlling spending, we should increase taxes, however Conservative argue that: 1. Government Spending is out of control . Look at the following graph, which clearly shows that government spending as a percent of GDP peaked in the early 1990’s and has been trending downward ever since. Although spending in absolute dollars has risen, GDP has risen faster. Our deficits are not the result of wild government spending, but rather extraordinarily low taxes. http://upload.wikimedia.org/wikipedia/en/d/d9/Us_gov_spending_history_1902_2010.png 2. Raising Taxes will reduce economic growth. If this were true then we should see significantly higher GNP growth as a result of low tax rates and lower GNP growth as result of high taxes. Look at the following chart, which shows the effect of tax rates on GNP. Sorry Republicans, Higher Taxes Will NOT Kill The Economy So, why shouldn't we reduce the deficit by increasing taxes?