Regulation Nation
“Regulations do have costs; often, as a country, we have to make tough decisions about whether those costs are necessary.” — President Obama, Wall Street Journal op-ed, January 18, 2011
Research says more red tape = less economic growth
In a March 2012 working paper, economists Ellen R. McGrattan and Edward C. Prescott from the Federal Reserve Bank of Minneapolis write that “there is direct evidence in higher annual costs of firms for compliance with federal regulations, rising expenditures of federal regulatory agencies, and rising employment of federal regulatory agencies” (emphasis added) demonstrating the failed economic policies of the Obama administration.
- Figure 13 from that paper shows “that spending on regulatory activities grew significantly faster than total spending and GDP. By 2011, regulatory spending is 11 percent above trend, while GDP is 10 percent below trend.”
- One of the paper’s conclusions: “We interpret higher regulatory costs to businesses as a key factor for lower [total factor productivity].” (economist-speak for a measure that relates an economy’s output with long-term technological change—so, lower TFP means less economic dynamism)
House Republicans have a Plan for America’s Job Creators—it’s time for the President and Senate Democrats to stop blocking our bipartisan jobs bills. More info in the “Win the Debate” kit—“Cutting Red Tape to Create Jobs”—can be found here.
For additional information, contact:
The House Republican Conference Policy Office
