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Andy Kerl Jr. / May 30, 2013

Which One Is Fatal?

Some one who dies a death by a thousand cuts is no less dead, than someone who dies suddenly. So to is it with a Nation. Clyde Wayne Crew in his 20th Anniversary Edition of “TEN THOUSAND COMMANDMENTS,” an annual snapshot of the Federal regulatory State, provides not just a snapshot but a panoramic view of the effects of bureaucratic big government. He writes:

“To be sure, many other countries’ government outlays make up a greater share of their national output, compared with 40 percent for the U.S. government. However, in absolute terms, the U.S. government is the largest government on the planet – whether one’s metric is revenues, expenditures, deficits, or accumulated debt. Only seven other nations top $1 trillion in annual government revenues, and none but the United States collects over $2 trillion…. The scope of federal government spending and deficits is sobering. Yet the government's reach extends well beyond Washington's taxes, deficits, and borrowing. Federal environmental, safety and health, and economic regulations cost hundreds of billions, perhaps trillions, of dollars annually over and above the official federal outlays that dominate policy debate.”

So, what then is the real cost of this largest government on the planet? Mr. Crew’s data shows that the costs of the regulatory state to business is greater for the small business than the large or medium sized business. His data shows that  a business of greater than 500 employees has a regulatory cost per employee of $7,755, while that of a medium concern of 20 to 499 employees has a regulatory cost per employee of $7,454 per employee, but small businesses of less than 20 employees cost of regulations per employees is $10,585. Considering that it is these small business that provide most of the new jobs in today’s economy is it any wonder that unemployment is staying consistently at 7-8%? But since all business pass along their costs to their costumers, who is really hurt by the excessive regulation of a burgeoning government? Mr. Crew again illustrates the underlying cost of regulation when he writes:

“If one were to allocate annual regulatory costs assuming full pass-through of costs to consumers, each U.S. household ‘pays' $14,768 annually in a hidden regulatory tax, or 23.2 percent of average income. That figure is higher than every annual household budgetary expenditure item except housing. More is 'spent’ on embedded regulation than on health care, food, transportation, entertainment, apparel and services, and savings. Embedded regulatory costs can be said to have absorbed up to 29.7 percent of the typical household’s expenditure budget.”

These costs amount to an additional 29.7% tax on the income of all Americans. Almost 30% of the average Americans household budget is eaten up by government regulatory costs! The saddest aspect of this regulatory mess is that while they are the result of legislation, our representatives do not create these regulations. They are devised, interpreted, enforced and codified by bureaucratic functionaries. They are working feverishly as Mr Crew’s data shows:

“The page count for final general and permanent rules in the Code of Federal Regulations (CFR) is more modest than that of the Federal Register, but the count is substantial nonetheless. Back in 1960, the CFR contained 22,877 pages. Since 1975, the total pages in the complete CFR have grown from 71,224 to 174,545 at year-end 2012, including the 1,142-page index. That figure is a 145 percent increase over the period.”

So, each of us must be cognizant of the fact that every wonderful sounding piece of legislation proposed to solve the myriad social problems often wrought by previous legislation comes at a cost. Today it is 29.7% of our household budgets. Who knows what it will be tomorrow. When you die by a thousand cuts does it matter which one was fatal?-


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