Home > Federal Power > There are now over One Million regulations holding the economy back

There are now over One Million regulations holding the economy back

June 10, 2014

About a month ago I posted that regulations costs should be considered in the minimum wage discussion. In that post I mentioned the Competitive Enterprise Institute (CEI) estimates regulatory costs amount to an average of $14,974 per household. That is a staggering number, and I still believe such number should be taken into account when talking about the minimum wage increase. Will increasing the minimum wage actually do anything to increase the purchasing power of anyone with such high regulatory costs? Today it is time to look at a different aspect of federal regulation on the average person: the fact that there are too many of them!

Often when speaking with people about regulations I am confronted with a variation of the same question: “Well, get specific, what regulation would you get rid of?” If only it were that simple. If you name an industry I can probably think of many regulations impacting that industry, but that is not the point. The point is there are so many regulation that must be complied with that removing any single regulation will do little or nothing to relieve the overall burden put upon American people by regulators.

The Mercatus Center (George Mason University) recently published a study showing the growing amount of regulations from  1997 to 2012. Patrick McLaughlin and Richard Williams also provided a brief article about the study which included the paragraph below and accompanying chart:

In its most basic definition, a regulation is a law that “seeks to change behavior in order to produce desired outcomes,” and it does this by requiring or forbidding certain actions. Figure 1 shows the growth of federal regulations from 1997 to 2012, as measured by counting the number of restricting words, such as “shall,” “must,” or “required,” that are printed in the Code of Federal Regulations each year. (For information on the methodology behind this chart, see our paper.) The total number of restrictions in federal regulations has grown from about 835,000 in 1997 to over 1 million by 2010. Over time, these accumulated restrictions can either directly foreclose paths to innovation or entrepreneurship or add up to the point where their cumulative cost makes certain actions prohibitively expensive.

Chart Source: Mercades Center, George Mason University

Chart Source: Mercatus Center, George Mason University

There are now over One Million federal regulations being imposed upon businesses and American citizens. These are not laws passed by Congress, or even executive actions imposed by the President. All of these One Million Plus regulations are created by bureaucrats that have no direct accountability to the American people. Now think back to that question “Well, get specific, what regulation would you get rid of?” and realize how difficult it would be to find one specific regulation that would actually lessen the impact of regulations upon the economy. Removing any single regulation out of 1,000,000 would be like removing a grain of sand from a beach, it will be completely unnoticed.

It is time for Congress and the President to get serious about actually forcing federal bureaucrats to remove old and/or unnecessary regulations. It is possible. In South Dakota I have been somewhat critical of Governor Daugaard. Yet I applaud his Red Tape Review process that has removed a lot of outdated code, rules, and regulations. Such an undertaking can and should be done at the federal level as well. It is unlikely the bureaucrats that comprise the many federal departments will do so willingly. This will require a Congress and President that actually care about reducing the impact of regulations upon the average American. But if such a process were to begin I believe it would have a greater positive impact on the average American’s purchasing power than any minimum wage increase ever would.

  1. Individualist
    June 11, 2014 at 1:00 am

    Very nice Ken.

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