JLF’s Jon Sanders discusses the burden that overregulation places on the economy.
A common theme — as it is so often with regulation — is protectionism for established providers against competition from new entrants and new ways. Hurdles, red tape, compliance costs, meddling, and so forth all work in effect to stifle and end economic activity.
They are small takeaways compared with the estimated $1.86 trillion annual cost of federal economic, environmental, health, and safety regulation — but they are additional costs that add up. Empirical studies of state regulatory burdens were even more likely than studies of state tax burdens to find negative economic effects. That is why state regulatory reform is so important.
Econometric studies can at least estimate the consumption by Nothing. Appalachian State’s John Dawson and N.C. State’s John Seater recently found that the growth of (just federal) regulation since 1949 has reduced the national GDP down to about one-fourth of where it could be.
That’s why it’s so important that the fiscal reformers in our state legislature have focused on paring back the web of state regulations. By doing so, we are on the track to unleashing the potential of this state once again.
