Recent studies have revealed some disturbing findings – and frankly, led me to wonder what could’ve been.
The first one is from the Journal of Economic Growth, which says government over-regulation has shaved 2% off growth every year since 1949. Think about that – 2% every year for 65 years
– that is a monumental impact!
For instance, the U.S. gross domestic product stands at nearly $17 trillion. Without over-regulation and its resulting 2% cost to growth, GDP would be $58 trillion. If that were the case, the U.S. (and the world) would be vastly different.
What could that look like? Some findings include:
Per capita income would be $101,000, not $54,000
Per capita net worth would be $480,000, not $260,000
No federal, state or municipal deficits
Social Security would be fully-funded
Pension funds would be fully-funded
Please don’t misunderstand, not all regulation is bad. After all, speed limits and seat belt laws save lives. They are sensible and improve the quality of life. The study doesn’t cite such regulation, rather it points to government overreach that is clearly holding us back.
In the last 20 years, there have been more than 90,000 new regulations (or 4,500 annually). No wonder 75% of voters say businesses are over-regulated, causing jobs to go overseas.
Burdensome regulations cause prices to increase, and who absorbs them? Not businesses. They’re passed on to consumers. In fact, many experts agree that over-regulation is simply concealing taxes that increase costs and, ultimately, hurt economic growth.
Which brings me to the second study. When you consider the effects of over-regulation, especially over time, it’s no wonder the Economic Freedom of the World Report ranked the U.S. 12th.
In 2000, the U.S. was second in the rankings. Makes you wonder what could’ve been.