It’s Time To Count The Regulatory Cost Of Government

Washington, D.C. – President Joe Biden's budget for the coming fiscal year is as audacious as it is reckless. Rather than rein spending in to reduce inflation, he's proposing to blow the doors off, taking annual federal expenditures from about $6 trillion, post-COVID, to nearly $10 trillion by 2033.

If it's enacted, and there's a snowball's chance it will be, the feds alone would end up spending about half of the value of all goods and services currently produced in the United States. Add to that the amount taken by states and local governments and the total approaches two-thirds.

That's what government in the United States cost the taxpayers, on paper. What isn't factored in (but should be) is the additional costs imposed by the regulatory agencies infesting the overall economy like termites. And, in furtherance of that analogy, once you start to see them, it's too late.

Many of these regulations come about after a crisis. The near-failure of the U.S. financial system back in 2007 produced Dodd-Frank. The collapse of Enron gave us Sarbanes-Oxley. The COVID pandemic produced mask mandates and lockdowns. And sometimes they come about because special interests working with politicians create a problem that garners enough media to convince people a solution is needed.

All of that imposes costs. Some people lose their jobs. Businesses close. Investors take their funds to other countries. Not because they perceive greater risk exists each time the regulatory regime expands – although that sometimes happens too – but because business owners operating on a thin margin in a competitive environment can't afford the additional expense.

Raising the minimum wage to $15 an hour may sound virtuous. People often fail to consider that though it leads to some people making more money, others lose their jobs. All of us, in the meantime, pay more. If you doubt it, check out what's happened to the price of hamburgers since the aforementioned increase went into effect.

Or consider the idea of requiring passengers traveling by air with infants to buy them a seat on the plane, something the Association of Flight Attendants has been pushing for almost 30 years.

On the surface that may sound like a good idea. There've been more than a few stories in the news lately about incidents involving extreme turbulence in which a small child sitting in the lap of an adult could have been severely injured or killed.

All that might be true. The net effect of that particular regulation would be an increase in the cost of air travel. This means more families would be forced to go places by car, which is a cheaper but more dangerous way to go than by plane.

To save you the trouble of doing the math, that means that while a child traveling by air might be marginally safer, more children overall would die because more people are killed each year in the United States in automobiles than airplanes.

The cost of regulation, in economic terms as well as in human lives, doesn't get enough attention and it's time it did. By some estimates, the Biden administration's first two years of regulatory activity drained more than $300 billion from the U.S. economy. His actions in the energy sector alone reduced what was pumped out of American oil wells by just about the same amount the OPEC nations and Russia just agreed they'd no longer produce daily.

That's a big swing in just that one area. In total, what Biden has done through regulation alone is a 50% increase over what Barack Obama did during his first two years in office and eight times more expensive than what Donald Trump did over the course of his presidency.

The 433 final rules the Biden Administration released through late October 2022 required roughly 193,000,000 hours of paperwork according to the non-profit group American Action Forum. That's more than 22,000 years. Nothing should take that long.

There are some in Congress and there are groups out there in the advocacy world like the U.S. Chamber of Commerce that have tried to bring attention to the problems caused by over-regulation. Right now, though, their complaints are falling on deaf ears among policymakers in both parties. Some of the toughest advocates for new regulation can be found, surprisingly, on the GOP side of the aisle. Missouri GOP Sen. Josh Hawley, for instance, is one of the loudest of the voices on Capitol Hill calling for the U.S. Federal Trade Commission to be given new powers to break up tech companies like Amazon and Facebook. In that way, he's little different than the many Democrats who want the government to set the price of prescription drugs, something most Republicans in Congress are quick to denounce.

When left generally alone, the system works pretty well. Former House Majority Leader Dick Armey, R-Texas, a former university professor of economics, has for many years had as his first axion “The market's rational. The government's dumb.”

Who can argue with that? There are plenty of examples out there of instances in which government regulation created new problems that the politicians attempted to address through additional regulation while at the same time failing to appreciably improve the original situation through its intervention.

It's time to consider the costs that must be incurred every time a government agency tells a business or a person to do something. Or when it blocks a merger, an acquisition, or the introduction of a new product. Looking at the supposed benefit is not enough.

The ongoing regulatory onslaught kills jobs, lowers wages and causes economic growth to stagnate. We need to give as much attention to the arguments against them as we do to the ones in favor. We also need to accept that the responsibility for keeping the economy going is a collective one and should not be passed to pro-business special interests alone.

The Biden administration's regulatory overreach is excessive. It's crippling businesses, stifling economic growth, infringing on our freedoms, and adding to the problem of inflation. By no means is all regulation bad but, if we accept at face value the claims of the profits of doom who believe business big and small is the enemy and that human action is inherently destructive, things will only get worse. There may even come a time when the knowledge and resources necessary to address problems in the future will be unavailable because regulatory prohibitions issued in the past prevented them from ever being developed.

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.

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