What does the Obama administration produce more than 60 of every day? Here is a hint: It’s not jobs. The answer lies at the heart of many woes facing small businesses and established industries — regulations. The regulation of businesses and industries has existed for millennia.
In ancient Egypt, we find one of the earliest examples of regulation — an anti-corruption decree. At their core, regulations are coercive actions, designed to prevent certain behavior. The goal of any regulation should be to achieve a benefit that would not be possible without it, designed in such a fashion that the achieved benefit far outweighs the costs.
We value the role of responsible regulations. Many regulations were designed with personal safety in mind, and these regulations make our workforce stronger. But our regulatory system has lost sight of this goal, and America’s economy is paying the price. Today, the federal government designs regulations that are often unnecessary and achieve little or no benefit at very high costs.
For example, the EPA’s compliance paperwork in 2012 alone took 176.2 million hours and cost $2.4 billion. We cannot just consider the time spent on administrative burdens, but we also must view those hours as time that was lost.
Think of what we could accomplish as a nation if those 176.2 million hours had been spent promoting small businesses, examining ways to create jobs, or investing in research and development. America can never achieve its full potential unless we free it from the fatal grip of overregulation.
Over a 90-day period, the administration posted an average of 68 new regulations and notices each day. Even more troubling, recent media reports estimate that more than 4,100 new administration regulations are making their way to U.S. businesses in 2013. If our economy doesn’t collapse from the sheer weight of these new administrative burdens, it will certainly be crippled by their cost — just 13 of these regulations are estimated to cost the U.S. economy $515 billion collectively.
In a 2011 speech, President Barack Obama stated that “rules have gotten out of balance,” and the result is “a chilling effect on growth and jobs.” The president is correct. The rules have become so skewed that our nation’s regulatory system is at war with America’s businesses. Industries such as manufacturing and technology are fighting to compete in a global market, but first they must survive the regulatory beast that is strangling innovation and growth. A recent National Federation of Independent Businesses study helps explain why our economy is struggling: Three of the top five challenges that small businesses are facing are linked to regulatory uncertainty.
And it’s no wonder, considering there are more than 400 regulations that specifically target small businesses. How can we expect Americans to unleash their entrepreneurial spirit and create new businesses and jobs when their fate is surely to be crushed by the regulatory monster?
Our federal government’s predisposition to overregulation creates a climate of confusion in the private sector about potential returns on investment. We’ve moved beyond the old adage “if it moves, regulate it” to “if it exists, regulate it.” It’s time for Washington to focus on creating a regulatory system that is flexible — allowing the market to decide the optimal path to implementation.