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The Cost Of Government Regulation: $1.75 Trillion
From Bill Buckler, author of The Privateer
The Cost Of "Intervention"
The Competitive Enterprise Institute (CEI) is a small “think tank” in Washington DC which puts out an annual report called: “Ten Thousand Commandments”. The report deals with the regulatory agencies of the US federal government and the cost of the regulations they continually introduce - and enforce. This report would be typical of the regulatory function of pretty well every government in the world.
In all interventionist economies, regulations are not set by the “lawmakers”. The “lawmakers” merely pass the laws, their enforcement is left to the various bureaucratic departments of government. And in order to “enforce” the laws, the bureaucrats see it as their function to impose regulations - countless thousands of them. The cost of complying with these regulations is met by those being regulated. It does NOT show up in the annual budgets (funded or unfunded) of the government.
In their Ten Thousand Commandments 2012 report which was released in June, the CEI estimates the cost of US government regulation at $US 1.75 TRILLION. That is just under half (48 percent) of the budget of the federal government. It is almost ten times the total of all corporate taxes collected and almost double the total collected from individual income taxes. It is also one-third higher than the total of all pre-tax corporate profits. It is the hidden cost of doing business in an interventionist economy. The fact that the cost of complying with these regulations is substantially higher than the total of corporate profits is a stark illustration of the end result of economic intervention. That end result is capital consumption.
In the US, the federal government lists its regulations in what is called the Code of Federal Regulations. These rules of the economic “game” cover 169,000 pages and more than ten new ones are added every day, seven days a week and 365 days a year. In 2011, the US Congress passed a total of 81 new “laws” while government agencies issued 3,807 new regulations. As the CEI points out, if there ever was an example of government without the consent of ANYONE - this is it.
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There is no 'American' citizenism. It is either 'Americanism ' (the way 'Americans' call it)
or US citizenism.
And no, it only grew from 1776,July, 4th.
The Chinese guy who abolished slavery in China around 0 BC did not do it on 'American' ground.
'Americanism' has started on 1776, July,4th and is ruling right now the world.
It did not in 1000 BC.
Pretty sure you were on about Romans and Greeks being US Citizens. Not residents of the town or country, but the ancient empires.
You say that slavery was abolished in China, yet all were slaves to Mao. Maybe you are too young to remember that horror, and the freedom that came to your people with the arrival of even the least meritous of US citizens, Hengy Kissenger.
If you want to be free of US citizenism, you should take a quick flight over to North Korea.
AnAnonymous said:
Yes, sure. What about the Chinese guys who reinstituted slavery in China many times between 0 BC and 2007 AD? Going to deny and offuscate? Better off you should admit your personal guilt as a slaveholder.
But hey, AnAnonymousism is nothing if not hypocritical.
What the hell is 0 BC?
tmosley said:
This is a beautifully succinct and and reasonably complete description of the meanderings of our AnAnonymousitizenism friend.
The tautological nature of his "citizenism" construct gives him free reign to disagree with everyone on all issues. Disagreement appears to be his calling in life, as I don't recall ever seeing him agree with anyone. The whole "citizenism" thing allows him to cloak his inconsistencies from himself as it provides a framework in which he can maintain what is, at least to him, a certain consistency.
So, the truth of the matter is that we are better off with central planners, kings, queens, comrades, commisars, etc.? That is the lesson of history? American went a different way and in a few generations surpassed all the nations on earth with the people from all those nations on earth living here in a different place.
I suggest the myth is that there is some number of pages of regulations, some infinite tax percentage, some level of absolute control that will eliminate evil from the earth. That is the myth. If it is not, then tell me how many pages of regulations and what tax rate will usher in your statist utopia? Since you know it is infinite and will not work let me ask you the easier question: "How many regulations and how high of a tax rate until you are thoroughly miserable?" That is a much lower number isn't it?
I prefer my myth to yours. No one goes to concentration camps, get taxed at 100% or is forced to do anything they do not believe in, or support those who are favored by the powerful. My myth is much more pleasant and liveable...and surviveable.
Alright, if 'libertarian policy' sounds too semantically oxymoronish to you, then we can only look at examples of society from our own experience. The only time I've been to Alaska, I was in Anchorage in Jan '98 to work on congressional term limits and medical marijauna ballot initiatives, and outside the post office one evening, a guy said to me, to the effect of, "I agree with what you're doing, but I just can't support having another law"; it concisely summarized for me a general sense of the local people that I'd been getting, at least in stark relative contrast to a place like California. I don't posit that Alaska is necessarily a paradise or even truly a libertarian haven, but for the right spirit, it might be. That's some awesomely beautiful land outside Anchorage. And moose. :-)
So, realpolitik, the kind that kills brown people on the other side of the world -- for your benefit -- is acceptable?
How about the realpolitik that takes (i.e., STEALS!) wealth from the productive to give to the indigent (that're too lazy to steal for themselves); that provokes no moral outrage from you?
Yet, heaven forbid that people that just want to hang onto their own hard-earned property and just be left the hell alone! Is that the gist of yer argument? Dog vomit has more appeal, frankly.
It would seem to be a reference to the neoliberal-driven elimination of regulations (Commodity Futures Modernization Act and Gramm–Leach–Bliley Act) and decreased taxes that has accelerated privatization of formerly public assets and financialization of our economy overall that is commonly attributed to Friedman/The Chicago School.
This seems unfair to Friedman, however, given that those who claim to be his bitter adversaries, viz, the Austrians, simply argue for more fanatical implementation of the neoliberal program and their voices were equally loud in support:
https://en.wikipedia.org/wiki/Neoliberalism
And with selective enforcement, small businesses suffer the most along with the fact that they do not have the economies of scale to comply as effectively as corporations. America has perfected crony capitalism.
Although I don't know why we call it crony capitalism when it sounds more like stealth fascism to me.
I always wonder why small businesses, instead of organizing in outright opposition to Biggie's Mob, spend their time and money working with them and then blaming government for what the biggies pay it to do to them.
But that's a 1.75 trillion dollar industry too
Combine this cost with the estimated 30,000 pages of rules and regulations under Dodd-Frank, and we are strangling the economy to death.
Wonder why jobs are not coming back?
http://confoundedinterest.wordpress.com/2012/07/19/jobless-claims-rise-d...
Dodd Frank is worthless and 30,000 pages is just the beginning
It’s been two years since President Obama signed the Wall Street-reform bill that has come to be known as Dodd-Frank. Has it succeeded in creating “safer and more modern rules of the road for the financial industry,” as Treasury Secretary Timothy F. Geithner claims?
Good question. To a large extent, we really can’t answer, even though a full 24 months has elapsed since Dodd-Frank became law. Why? Because many of the rules remain unwritten, creating tremendous uncertainty among affected firms and consumers. Dodd-Frank didn’t so much create new rules as create the institutions that would set up the rules, and most of those rules don’t yet exist.
According to Jonathan Macey of Yale Law School, “Dodd-Frank is not directed at people. It is an outline directed at bureaucrats and it instructs them to make still more regulations and to create more bureaucracies.” In essence, Congress punted. Lawmakers outsourced their constitutional duties — and on an important issue that affects millions of people.
more
http://www.washingtontimes.com/news/2012/jul/16/dodd-frank-dangerous-dead-end/
About The Dodd-Frank Act, George Washington Would Be Turning Over In His Grave
http://www.forbes.com/sites/realspin/2012/07/02/about-the-dodd-frank-act-george-washington-would-be-turning-over-in-his-grave/
Congress doesn't give a rat's ass about jobs; they're too busy lining their own pockets before the shit hits the fan.
More succinctly, We are strangling on our own spit. Milestones
Thank God i am a mortal. Who is this taxpayer everyone speaks of?
"Who is this taxpayer everyone speaks of?"
Sorry to say and needlessly offend everybody AGAIN:
Some sorry collaborator.
I have little sympathy for the corporations seeing how they themselves wrote all the laws and regulations. Most of them are designed to prevent said big corporations suffering competition from smaller companies who can't afford to comply.
buzz, what a polite way of denouncing fascism.
Corporate fascism , with all the beauty of her brands and their uncompetitive love of unfree regulated enterprise.
If you don’t want to comply [Obama administration’s FY 2013 budget includes four new international tax proposals], we have a drone in the sky to help you rethink your mandatory donation requirements.
/sarc
If you don’t want to comply [Obama administration’s FY 2013 budget includes four new international tax proposals], we have a drone in the sky to help you rethink your mandatory donation requirements.
106 governmental agencies have NOW recieved permission to use drones.
Bstds will be like flies.................
SHow a Gull one morsel and a thousand gulls show up.
heh.
.
That's when you start tossing Alka-Seltzers into the air.
This sort of article, while factual, promotes the mindset and political mantra that all regulations are bad when the problem is that there are bad regulations designed to protect businesses from competition that are enforced and good regulations that are not enforced because of the political influence of those being regulated (ex., TBTF banks). Not all regulation is bad. The problem is that regulations that promote crony capitalism are enforced while those that serve to protect the general public from crony capitalism aren't.
You mean that in US citizen economics, the regulations that are funded to be enforced are enforced while those that are contrary and unfounded are not?
That is very surprizing. Who could have expected such result?
By rejecting pure black and white ideological thinking, you are on dangerous ground with most of those who gravitate towards this thread.
You also need cholesterol to live. But if I point out that eating a Big Mac every day is a bad situation and your cholesterol numbers are outrageously high, I don't think pointing out that some cholesterol is good is very pertinent.
The problem is, for every good regulation, there are 10,000 bad ones.
Bureaucracies are like cancer: they grow, they grow quickly, and they metastasize into additional bureaucracies.
Bullshit
I.m sure we can all agree that regulations that stop entities from polluting the environment are good, as well as those that protect the general health of the citizenry. But the vast amount of regulations on the books, at least on the local level, are geared not to protect and serve, but to raise revenue to keep up with the pace of spending, most of which serves special interests and not the general public.
Costs don't matter. Downgrades don't matter. Treasuries will continue to skyrocket as long as there are problems in other parts of the world.
While Congress is aghast at the deficits and everyone is talking about "The Fiscal Cliff", the Treasury market is laughing.
Don’t panic RobotTrader. Your mom won’t give away your basement space to a higher rental bidder.
How Much Lower Will Treasury Yields Go?
Colorado Theater False Flag?
When seasoned investigators are already saying none of this adds up, it likely doesn't.
http://www.naturalnews.com/036536_James ... z21JejuF5z
http://www.presstv.ir/usdetail/252061.html
http://www.wkyc.com/news/article/252995 ... ie-theater
http://www.nowpublic.com/world/final-ch ... false-flag
Do ya think?
"The fact that the cost of complying with these regulations is substantially higher than the total of corporate profits is a stark illustration of the end result of economic intervention."
If left unchecked I gurantee you big government will suck the global economy fucken dry.
DEREGULATE, PRIVITIZE. Enough with this socialist nightmare.
This is red herring. Those guys all love government. it's been a source of power, privilege and employment for them. As soon as Republicans get elected, all those Think Tank Fellows will get jobs working for the government writing more laws so they can loot public treasury.
An independent form of government is a myth: government it's an outsourced institution for corporate employees and their private sector consultants to wield power over the populace and US Treasury.
The so called LIBERTARIANS(neo-liberals) with their advocacy of free trade, privatization, open markets, deregulation and trivial taxation for the rich have destroyed western democracies.
Government is milked by BOTH parties.
Funny, this is so BULLSHIT! The COST of not having enough regulation we just saw, 14 TRILLION and growing in direct bailout to finance! We need more not less regulation! Written by a 1% suck-up without re-guard to we who work not living off the trust fund!
Not at all. The cost of not having the regulations is zero. Fourteen trillion is the cost of not using the bankruptcy laws. The problem is not lack of regulation, which does not work well anyway, it is the erroneous belief that anything is too big to fail. That this belief is erroneous is about to be proven by the failure of the whole EU, followed closely by the US. This is an oddly ignorant belief for a ZH reader. Are you a bot, controlled by government employees? If so tell you master, that he will not collect his pension. HaHaHa!
The question is what are the benefits of this regulation? For example environmental regulations cost a great deal of money to ensure clean water. Suppose these regulations did not exist and the water in the lakes, rivers, underground was toxic--so that all the water you use in your home had to be distilled. How much do you think it would cost to distill all this water?
The proper venue, if your water is contaminated, is civil court, as many of the victims of poorly executed shale gas drilling are now doing. The biggest polluter is the US, is of course the US government, since it's regualations often are not applied to it's own operations.
ummm the biggest polluter is China....
We could eliminate 40 to 60% of all regulations and be much better off.
Congress should stop letting Federal Agencies write their own regulations. If there is a need for Federal intervention, Congress can and should write clear concise laws. The morons in DC, need to write laws that are simple enough for even them to understand, not written by lobbyists and less than 50 pages long.
The dead and the bankrupt have a hard time collecting. You sound like a Cock Brother TROLL. There are more than a few of you here.
Considering there is no regulation at the top, hence the trouble we are in, the first thing I did was google CEI, which led me to Fred L. Smith, and on and on down the rabbit hole. Too much regulation on the bottom, but that's not what they are against.
Not really. It shows how primitive and gross our economy is. High tech economy cannot be run as a 19th century business, as we are trying to do. There is too much waste, too much speed, too much information, too many lies running deep below and awe inspiring inertia.
Articles like this, bashing only impotent regulation make it worse.
But it is at these times of obviousness when I am intensely wondering who's interests ZH might be peddling.
So, is the US Govt STILL subsidizing mohair (goat, that is) producers?
Just wondering what would be the costs of NO regulations. Seriously, there must be some costs associated with all business and industry operating without any oversight.
Just sit back for a while and consider it, the dollar signs start to add up at lightning speed.
And YES, many regulations are designed to put small business into the shadows and favor the big corporations. The lobby effort of big business is carried on at a net profit or they would not do it.
I am for reduced regulation where ever it can be done without ADDING big direct and indirect costs to taxpayers or medical care costs.
Taxes at the state, federal, and local level is at about 40%. Based on a $13 trillion GDP from 2011, that gives us about 13.5% of GDP is tied up in regulation.
So over half our economy is tied up into not producing wealth.
Republicans want deregulation. They're too dumb to see deregulation always leads to increased risk, and increased risk is the last thing you want in the finance sector. Total the amount of damage that goes to Phill Gramm and the bullcrap derivative products created in a private, deregulated environment. Drag Phil into Congress, denounce him, and throw him in prison. If the derivative products were created in a private environment, they can stay in the private environment. Private as in prison cell. We got rid of Jerry Sandusky and Joe Paterno, Rupert Murdoch and his son resigned from NI this weekend, and Rush has to get Mitt RoMONEY into the White House. Good riddance.
Increased risk in the finance sector could be a very healthy thing. Had they all been a little more worried about their OWN risk, we wouldn't be bailing them out today.
$700 trillion in CDS ready to blow up in your face isn't risky enough for you?
The point is, they are using the CDS to offload the risk onto society at large.
If they had to absorb the risk themselves, the CDS market wouldn't exist.
You simply can't regulate the financial industry because the regulators will always have a tiny fraction of the resources of the ones they are regulating, putting them at a hopeless disadvantage.
Why is it that the more regulations we have, the easier it is for the criminals to prosper? Funny how no one ever asks that question. Yet there is always a crowd of idiots who clamor for "more regulations"!
Um, with all due respect, CDS was never regulated in any way, shape, or form. Research Brooksley Born, and get back to me when you get your head out of Greenspan's ass.
Problem is the smartest guys in the room aren't in government; they're the ones working day and night figuring how to get around government.
There are many ways to simplify and automate many of the aspects of regulation. This part of government hasnt caught up with the efficiencies possible with technology today.
And that's no accident.
You are so right! Several Federal agencies will be in your office and home tomorrow to begin installing remote cameras, listening devices and recorders for all that you do. Drones will follow you everywhere you go. We can do this with technology!
Ever watch "Brazil?"
Bob W. interviews Robert Shapiro,
at about the 26 minute mark the infamous words are uttered:
"...this interview is over."
http://www.economicpolicyjournal.com/2012/07/a-keynesian-economist-melts...
Another elitest bites the dust.
The best example of goverment regulation costing Americans is with respect to the FDA. This corrupt organization has driven the price of medications and medical devices sky high and with little effect for safety. When it costs $600 million and ten years to approve a new drug only the big corrupt companies can afford it. No one will pay to get FDA approval for a nearly free herbal remedy that is more effective.
I worked on the development of advanced xray technology and was shocked to see the results. The machine was a digital xray that decreased radiation dosage by a factor of 10 and increased resoltuion by a factor of five. We manufactured the machine for $45K and sold it in this country for $220K. We sold the same machine in Mexico for $80K - cheaper because there were no approvals to worry about. The Mexican clinics bought dozens of the machines five years before any of the American clinics could even get them. Most U.S. clinics could not afford the high price so they continued to use 30 year old equpment. This is repeated over and over. All the most modern equipment is in foreign clinics and the U.S. has the oldest and worst. The FDA has regulated us out of good health.
The same with the FAA. Approvals are so slow through the FAA that American airways carry the oldest, junkiest equipment in the world.
When you hear of costs for government regulation also think lives lost.
Just for funr I read the CEI report. There is nothing in it, no new analysis and definitely no cost estimates.
Waste of time. Next time just put up the headline 'Regulations and Government are Bad' with no text, and you'll get the same comments for less effort. Much more efficient, doncha think?
The study they reference for that figure:
http://goo.gl/AFujz
Critique of said study:
http://goo.gl/k01dn
Personally think the costs are immeasurable and it's ridiculous to bandy about any figure; the regulatory burden shapes entire industries, forms insurmountable barriers to entry for smaller competitors, and create beachheads from which the legal, compliance, and metrics parasites interject themselves into profitable concerns.
Agreed. It is just largely a trash sensationalist headline to gather some buzz and attention to these hucksters. Not much more. Certainly nothing worth really debating one way or the other since there is basically no methdology here to even look over.
Regulations are in place for a reason. Go ahead, try stripping them... you won't be happy about it. Companies will get more profits... you on the other hand... haha, good luck.
As mentioned before, market intervention has only postponed the inevitable.
Despite short and medium term market vacillation - the following remains a constant :
>> USDX monthly indicators [ie big picture] continue to warn of significant long term USD upside. (thus EURUSD & AUDUSD etc bearish)
>> SPX monthly indicators [ie big picture] continue to warn of significant long term downside for equities which will be worse than 2008.
http://www.zerohedge.com/news/2012-12-24/market-analysis
Their are no ideologies left folks. Only agendas. The bottom line is that big government, who is unaccountable and rarely gets fired for a lousy job, have put us into this financial mess and their short term planning is making this worse by the day.
Now big government is spending TRILLIONS to delay the pending market crash until after November 2012.
And the Rule of Law is an orphan. Money rules . . . and it seems to have all the bases covered on ways to extract it, both publicly and privately.
http://www.iadb.org/intal/intalcdi/PE/2012/09985.pdf
"big government" has had jack shit to do with this whole mess. If you want someone to blame, look at the ones who are bribing laws into existance and the ones who are tearing apart the system for some extra profit.
These kind of simplistic nonsense arguments like 'regulations good, regulations bad' are ridiculous without context. You need to look at a pretty specific set of regulations covering a pretty finite topic to even have a worthwhile conversation. Since that takes time, lots of analysis, and is subject to boring arguments about methdology, it is something that almost no one will engage in.
Either to just argue nonsense as almost this entire thread has been.
So in 2020 how is GVT. going to ration off the 100 billion allowance among all branches WE THE PEOPLE so graciously GIVE THEM.
It's a good thing the profligate regulations have everything so well protected.
Just imagine how much worse things would be if regulation was used only prudently.
Big government and excessive regulation are the problem. Entrepreneurs will invest where the opportunity is as long as there is not excessive regulation. The US needs to slash govt to the bone. Remove all the excessive regulations that are strangling small to medium sized enterprises.