Costs without Benefits; the Unrestrained Growth of Government Regulation
Byline: Richard W. Rahn, SPECIAL TO THE WASHINGTON TIMES
If a sports league set up a permanent office with a number of lawyers to write new regulations for its particular game (basketball, for instance), what do you think would happen after a few years? The lawyer-regulators would know that if they stopped writing new regulations, whether needed or not, they would be out of a job. Over time, the regulations would grow in both number and complexity, and the players would have a more and more difficult time understanding what the rules were and would increasingly, though unintentionally, run afoul of them. The fans also would no longer understand all the rules and probably would begin to lose interest in the game. Finally, the game would die under the weight of all the new regulations.
Professor Susan Dudley of the Regulatory Studies Center at the George Washington University and Melinda Warren of the Weidenbaum Center at Washington University in St. Louis have just published their annual report of the U.S. government's regulatory budget. The bottom line is that the government's regulatory budget is about $52 billion per year and has been growing faster than the federal budget in general and also as a share of U.S. gross domestic product (GDP). If this trend continues, the United States will become one vast regulatory state and, eventually, the economy will become strangled by its own regulations. The direct government costs of regulation are tiny compared to the costs on the private sector, which have been estimated by economists to be, on average, approximately $20 for each dollar the government spends, or something more than $1 trillion and roughly 15 percent of the U.S. GDP.
What do we get for this enormous cost? The only thing we know for sure is that most regulations reduce our freedom. No individual can know the vast number of laws and regulations to which he is subject, and hence, the government (if it chooses) can target anyone and almost certainly be able to find some law or rule that the targeted person has violated. According to Thomas Jefferson, the U.S. Constitution only gave Congress the power to punish criminally treason, counterfeiting the securities and coin of the United States, piracies and felonies committed on the high seas, and offenses against the laws of nations, and no other crimes whatsoever. Yet the federal criminal code contains thousands of pages, making it impossible for individuals to know all of the violations for which they may be sent to jail. …