The burden of government regulation continues to grow for each and every American.  A recent study estimated the regulatory burden in the United States in 2014 was more than $1.8 trillion, which is bigger than the entire GDP of all but nine countries. These regulations drag down our economy when we should be working to boost economic growth and help create more jobs and promote small businesses.

Unfortunately, eliminating regulations from the books is politically difficult.  As a result, the nation’s innovators, startups, and market disruptors expect the economy to be over-regulated, not under-regulated, and must account for dealing with burdensome regulations as part of their business strategy.  In fact, a recent Gallup poll showed that the United States dropped to 12th among developed nations in terms of new business startups.  This means America’s next potential business powerhouses like Google, Twitter, or Facebook will face even more challenges as they work to keep our nation at the forefront of global innovation and technology.


Some people, like George Washington University law professor Richard Pierce, contend that the regulatory burden we have now is ideal and that if anything we should add more regulations.  During a recent joint hearing between the Senate Budget and the Homeland Security and Governmental Affairs Committees, he explained that each regulation is passed only if the calculated benefits of the regulation exceed the calculated costs; thus, all current regulations are on net beneficial.  There are two problems with this presumption. First, as Susan Dudley, former administrator in the Office of Information and Regulatory Affairs, discussed at the hearing, the sheer task of calculating these benefits and costs is extraordinarily difficult and highly politically charged. Second, regulations that were once important often become outdated, unnecessary, and overbearing as the world changes. Thus, these over-regulations give our economy a solid one-two punch of decreased jobs in the short run and diminished innovation in the long run. 

Why do our elected leaders continue to let this regulatory excess grow?  The answer is much simpler than we think.  Politicians from both sides of the aisle have an incentive to do and not to undo because doing concentrates benefits on a small group of people (like constituents) at a cost to the general public, while undoing helps the general public at a cost to the small group. but may remove those special benefits that have accrued over time.  It is time to force politicians to carefully consider the true social costs of regulations before enacting them. Congress and the president’s executive branch should also consider other non-regulatory options to accomplish public policy goals.  Further, politicians should be motivated to find and remove onerous regulations so as to help the country as a whole.

Sens. Mike EnziMichael (Mike) Bradley EnziChamber of Commerce endorses Ernst for reelection Republicans battle over COVID-19 package's big price tag Conservative group launches ad campaign for Rep. Roger Marshall in Kansas Senate race MORE (R-Wyo.) and Ron JohnsonRonald (Ron) Harold JohnsonGOP chairmen hit back at accusation they are spreading disinformation with Biden probe Unemployment debate sparks GOP divisions Tensions flare as GOP's Biden probe ramps up  MORE (R-Wis.) are two senators who are currently working along these lines.  During the joint hearing they heard from Canadian Parliament member Tony Clement, who is the current president of the Treasury Board of Canada. Clement detailed his experience cutting red tape and how the culture of regulation is anathema to businesses and economic growth.  To help reduce this, Canada requires that any new regulation that is passed be accompanied by the repeal of an older regulation, essentially a “one-in, one-out” approach.  In doing so, the Canadian government is not only ensuring that the onerous costs of regulation to businesses are not increasing year after year, but they are also incentivizing politicians to find excessively onerous regulations and remove them from the books in order to create space for their new regulation.   [This at least ensures there’s no net regulatory increase, setting the stage for a more ambitious mindset in time that would actually look to reduce net regulatory burden, not just hold it constant.]

It is long past time for the United States to follow the lead of its northern neighbor when it comes to tackling burdensome regulations by incentivizing Congress to find regulations that can be removed. Instead of constantly turning to new regulations to fix our problems, our leaders should instead look for alternative solutions that not only solve the problem, but also avoid burdening our businesses with oppressive regulation and actively seek out regulations that can be struck.

Hebert has a Ph.D. in Economics from George Mason University and is currently an assistant professor of Economics at Ferris State University.  His specialties include taxation, regulation, and public policy.