Free market conservatives and libertarians well understand the perils of excessive red tape and an unchecked regulatory state in the abstract. But a new report makes clear the true cost of overregulation for real people. The figures are quite striking.
The report, Ten Thousand Commandments 2020: An Annual Snapshot of the Federal Regulatory State, was published this week by the Competitive Enterprise Institute, a free market think tank. The study’s author, Clyde Wayne Crews, pored over publicly available private and government data to evaluate and estimate the size, scope, and cost of our current regime of federal regulations.
He concludes that the aggregate cost of federal regulation is, at a minimum, $1.9 trillion. To put this number into context, a country with a $1.9 trillion GDP would have the ninth-largest economy in the world!
CEI’s new report finds federal regulations costing Americans approximately $1.9 trillion annually. That’s a stack of $100 bills more than 1,200 miles high. #10kc2020 Learn more: https://t.co/7XHmRRjTjq pic.twitter.com/1rQviOVTiB
— Competitive Enterprise Institute (@ceidotorg) May 27, 2020
Moreover, our sweeping, costly regulations aren’t simply borne by “big business” — they’re passed on to consumers via higher prices and to workers through reduced wages. Thus, CEI estimates that federal regulations cost each U.S. household $14,000 annually in “hidden taxes.” This exceeds what people pay in corporate and income taxes combined.
The craziest part? This is just for federal regulations. If you also added up the costs onerous state and municipal regulations impose on the public as well, the figures would be considerably higher.
There is some good news, though. By a number of measures, the study finds that the Trump administration has made substantial progress toward deregulation, to the economy’s benefit.
“The number of new, final rules is way down under Trump: 9,611 total over three years,” the report reads. “The number of pages in the Federal Register — one sort of measure of regulation — are fewer under President Trump compared to his predecessor.”
President Trump is on strong footing with his deregulatory record, but there’s much more to be done — and his efforts could be undermined if he ends up adding new regulations elsewhere.
The CEI report offers specific recommendations for what deregulatory paths we should pursue next:
If Trump wants to oversee a successful economic recovery after the coronavirus downturn, he should take this advice.
