Regulations Make Us Poor

One of the permanent complaints heard from small government conservatives is that regulations have a stifling effect on the economy. The more government involves itself with the way Americans make money, the less money Americans actually make. For years however, the government has been pursuing the national interest of making the market safer and fairer, but in reality, what they’ve done is make our economy less competitive in the world. In simple terms, government regulations make us poor.

Well, conservatives now have some real hard data to hang their limited regulation hat on. Over the last two decades, a couple of researchers have been compiling and studying data from the US government that compares the growth in regulations since 1949 and economic performance (measured by growth in GDP). The data isn’t good for any of us, but is especially damning for supporters of big government regulatory policies.

The report concludes:

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“Regulation’s overall effect on output’s growth rate is negative and substantial.
Federal regulations added over the past fifty years have reduced real output growth by about two percentage points on average [annually] over the period 1949-2005. That reduction in the growth rate has led to an accumulated reduction in GDP of about $38.8 trillion as of the end of 2011. That is, GDP at the end of 2011 would have been $53.9 trillion instead of $15.1 trillion if regulation had remained at its 1949 level.”

The Federal government has been actively hurting our opportunity to build the economy for years. Many of these regulations are over-burdensome, ill conceived, and not actually accomplishing anything. Once you understand that the goal of government taxation, regulation and oversight is not necessarily to make money for the government but actually to increase government power – then it all starts to make sense. Regulations are sometimes noble, sometimes perverse, and sometimes antagonizing but they always serve the purpose of transferring power from you the individual to the government.

If you’d like to know what impact these regulations have had on you personally, Ronald Bailey at, took the study one step further and did the math on how regulations are making us all poorer.

“As a result, the average American household receives about $277,000 less annually than it would have gotten in the absence of six decades of accumulated regulations—a median household income of $330,000 instead of the $53,000 we get now.”

empty walletOne piece of information that immediately makes what this news this study uncovers even more daunting for freedom loving Americans, is that the researchers didn’t even touch state or local regulations. All of this data is based just on federal regulations alone.

The obvious answer is “let’s dump the regulations.” However, government regulatory power is a sacred cow to the left. As much as they march, scream, and protest that they are for greater civil liberties and the less government intervention, they do not realize that by asking the government to heavily regulate industry and the economy, they are begging for government oversight into their personal lives as well.

It’s high time we get the government out of the regulating of business so that we can start enjoying our full financial potential.

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