Tuesday, July 02, 2013
Regarding federal regulation of the economy, I wrote the following a couple of years ago:
The silent killer in this story is federal regulation of the economy. Its estimated annual cost of $1.75 trillion is about two-thirds that of the tax burden. Sam and Karen, although fictional, are based in part on averages obtained from a recent report (PDF) prepared for the Small Business Administration on the impact of federal regulations on the United States economy. Notably omitted from the report are the additional costs of state and local regulations, as well as snowballing effects, such as lost opportunities and a slower pace of innovation. [bold added]Well, via HBL, I have learned of an attempt to quantify the snowballing effects, and the results are quite shocking. Investor's Business Daily reports the following, among other things, from a study of the effects of federal regulations on the growth of America's GDP:
"Federal regulations added over the past 50 years," they say, "have reduced real output growth by about two percentage points on average (annually) over the period 1949-2005. That reduction in the growth rate has led to an accumulated reduction in GDP of about $38.8 trillion as of the end of 2011.As in the earlier study I wrote about, the numbers, as shocking as they are, still omit the additional drag that state and local regulations place on the economy.
"That is, GDP at the end of 2011 would have been $53.9 trillion instead of $15.1 trillion, if regulation had remained at its 1949 level."
Numbers that big aren't easy to put into perspective. But at a more micro level, they mean losses of "$277,100 per household and $129,300 per person" per year, the the authors reckon. [bold added]
The time to begin dismantling the destructive apparatus of government regulation of the economy is now.