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America’s Regulation Burden, in 5 Charts
The Obama Council of Economic Advisers ended strong, and the Trump CEA may be picking up right where they left off. The council is out with a report and literature review on regulation:
Excessive regulation is a tax on the economy, costing the U.S. an average of 0.8 percent of GDP growth per year since 1980. This taxation by regulation has increased sharply in recent years, with approximately 500 new economically significant regulations created over the last eight years alone. Through a thorough review of the literature, the Council of Economic Advisers (CEA) finds that deregulation will stimulate U.S. GDP growth.
Certainly not every regulation is a bad one or is preventing sustainable and balanced economic growth. But some do, and the report correctly highlights occupational licensing as one barrier to labor market entry. Regulation that empowers incumbents over challengers is what I worry about. Bans on plastic water bottles in national parks, less so. And the following charts may suggest how much a burden regulation currently is on the US economy:
This would be Exhibit A in our national autopsy report.
Every regulation will have its defenders, but the only defensible regulation is one that actually enables economic activity instead of constraining. There’s a good case for getting rid of all of them and allowing the resulting surge in economic growth to make everyone better off: https://politicsandprosperity.com/2016/08/31/the-rahn-curve-revisited-2/
This is one area where we should thank our president and some of his people.
James can you do a post about all the awesome economic things that this president has done. ;-)
Hey maybe how cool it would be to pass some tax laws that helped most of the middle class. Also how if the republicans have any brains they’ll pass something just to keep all this awesome winning train a rollin’.
Thanks in advance.