Investors Business Daily cites a George Mason University Study of the compliance cost of federal regulations which finds that those costs are truly staggering.
Economists scratch their heads when asked to explain the economyâ€™s tepid growth over the past several years. A new study gives a possible answer: the growing, cumulative burden of federal regulations.
Under President Obama, annual GDP growth never once even hit 3%. Under Bush before him, there were only two years when growth topped 3%. But in the two decades before that, annual GDP growth was above 3% in all but six years.
Growth has been so anemic for so long, weâ€™re now being told that this is the â€œnew normal.â€ As the Bureau of Labor Statistics put it, â€œannual U.S. GDP growth exceeding 3% â€¦ is not expected to be attainable over the coming decade.â€ It lists everything as a cause, except for one thing: federal regulations.
Whenever a new regulation gets passed, the government puts out a cost analysis, which focuses on annual compliance costs. Thatâ€™s fine for a point in time. But these regulations donâ€™t go away. And every year more get added to the pile. The Code of Federal Regulations is now more than 81,000 pages long.
Whatâ€™s the cumulative impact of all these rules, EDIT3-regu-042616regulations and mandates over several decades? A new study by the Mercatus Center at George Mason University tries to get an answer, and what it found is mind-boggling.
The paper looked at regulations imposed since 1977 on 22 different industries, their actual growth, and what might have happened if all those regulations had not been imposed.
What it found is that if the regulatory state had remained frozen in place in 1980, the economy would have been $4 trillion â€” or 25% â€” bigger than it was in 2012. Thatâ€™s equal to almost $13,000 per person in that one year alone.
Looked at another way, if the economic growth lost to regulation in the U.S. were its own country, it would be the fourth largest economy in the world, as the nearby chart shows.
Read the whole thing.