Ever wonder why this "recovery" is so anemic?
We've seen such lackluster growth over the last few years that there is talk of a "new normal" of lower expectations in what was once a powerhouse economy.
The GDP has not once hit 3 percent under Obama. Under George Bush, there were only two years when it was above that. But in the previous two decades, it was above that in all but six years.
Compliance with regulations has to be some of the cause, but it is hard to tell how much. When a new regulation is, the government estimates the cost, based on annual compliance cost.
That's fine, as far as it goes. But the regulations remain, while new ones are added. The Code of Federal Regulations has grown to an astonishing 81,000 pages.
A new paper from the Mercatus Institute at George Mason University considers the cumulative effects of these regulations–and the results of the study are astounding. Investors Business Daily reports:
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 — or 25% — bigger than it was in 2012. That’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.
The authors of the paper are Patrick McLaughlin, Bentley Coffey, and Pietro Peretto, who caution the reader that they study only the costs of compliance and make to attempt to evaluate the benefits (cleaner air, safer workplaces, etc.). IBD suggests that we are not, in fact, getting $4 trillion in benefits today.
The Obama administration issued 172 new regulations in the first term and 200 in the second. That is 85 more than Clinton and 100 more than Bush.