The foundation of the American economy lies in each individual’s ability to make better products and services than had existed before. Never before in America has the innovator had so many ways to achieve success and simultaneously so many hurdles to doing so. The internet, computers, and modern manufacturing should allow for more people to create new products that we all love more easily than in any point in history, but government regulation has stifled the dream of so many Americans to contribute to the economy under their own names and ideas. The freedom of entrepreneurs to innovate, which made America so strong in the 20th century, has been shipped overseas along with so many jobs, and as a result the U.S. economy has grown at a historically low rate.
Red tape prevents a better educated middle class from starting businesses. For example, in order to start a lemonade stand in New York City, an entrepreneur would have to take a fifteen hour food protection course and pass the subsequent exam. Then, the aspiring business owner would have to register for a food establishment permit, arrange to be inspected by the NYC Health Department, buy a government certified fire extinguisher, get a contract for waste disposal, and complete many more mandated steps. Finding property in NYC is another problem altogether. Crippling government regulation makes construction many times more costly in the big apple than in Hong Kong or Beijing, slowing the growth of the skyline and increasing costs for those looking for space. As a result, more people are content with finding a job working for someone else who deals with the regulatory mess for them. Predictably, youth entrepreneurship in the United States has been dropping. When people find it harder to take their ideas to market, fewer products are invented, and everyone suffers, from the would-be business owner to consumers who would buy the product, all the way to workers who would see their services in greater demand.
Regulation not only prevents new businesses from starting but also adds to existing businesses’ operating expenses. The total cost of regulatory compliance to the economy in 2014 was $1.88 Trillion, more than the GDPs of Canada and Australia. Manufacturers spend roughly $20k per employee on regulation, and the costs decrease as the company grows larger. Politicians who use regulatory measures to punish big business only hurt smaller competitors to those businesses. Nearly two thirds of firms surveyed by the Small Business Administration reported that they faced more than minor regulatory burdens, and a quarter of them claimed that the burdens were “substantial.” Small businesses also innovate more than larger corporations, filing sixteen times more patents. The cost of excessive regulation effectively acts as a tax on all households in America as the cost is factored into families’ paychecks and the price of goods. The federal government spends almost $60B on enforcing these regulations, enough to build Trump’s border wall (estimated at $8B by Trump himself) in addition to 34 bridges equivalent in size to the Goethals Bridge currently being replaced in NYC ($1.5B). These operating costs force companies overseas where they have an easier time legally producing what companies have traditionally made in the United States and makes the companies that stay in America less competitive.
The bureaucracy has steadily added miles upon miles of red tape and now has grown to a point unprecedented in American history. Among the six all-time highest Federal Register page counts, five have occurred under President Obama. The number of new regulations put in place far surpasses the number of laws passed by Congress. Regulations have become a way for the government, specifically the executive, to unilaterally impose its will on citizens without going through Congress. They mandate that corporations do things that the government cannot provide, and where the bureaucrats cannot mandate, they incentivize. Because there are so many regulations in place, businesses cannot possibly be expected to follow every single one to the letter of the law, especially when considering that some regulations can be interpreted differently.
In 2014, motor vehicle accidents killed more American teenagers than any other cause of death according to the CDC. Auto manufacturers are incredibly regulated, but the government will not ban cars or regulate them so heavily as to kill the industry altogether. Of course, cars provide incredible good in the lives of all Americans. The predominant fear is not that the government will kill an existing industry but rather that it will kill the next great innovation. The automobile revolution has gone and passed, but drones, for example, are struggling to get off the ground in America, and if they cannot succeed under the U.S.’s laws they will succeed under the flag of another country. While drones, like other new technologies, do have risks associated with them, making them completely safe is unrealistic, and the government must be able to accept some of that risk. Red tape in America is killing entrepreneurship, exacts incredible costs on businesses, and is growing by the minute. Without ending this era of big government, the stacks upon stacks of regulation will continue to create a sluggish American economy where jobs are shipped overseas, inventions are created somewhere else, wages are low, and jobs are scarce. It is the greatest challenge facing the American economy.
The foundation of the American economy lies in each individual’s ability to make better products and services than had existed before. Never before in America has the innovator had so many ways to achieve success and simultaneously so many hurdles to doing so. The internet, computers, and modern manufacturing should allow for more people to create new products that we all love more easily than in any point in history, but government regulation has stifled the dream of so many Americans to contribute to the economy under their own names and ideas. The freedom of entrepreneurs to innovate, which made America so strong in the 20th century, has been shipped overseas along with so many jobs, and as a result the U.S. economy has grown at a historically low rate.
Red tape prevents a better educated middle class from starting businesses. For example, in order to start a lemonade stand in New York City, an entrepreneur would have to take a fifteen hour food protection course and pass the subsequent exam. Then, the aspiring business owner would have to register for a food establishment permit, arrange to be inspected by the NYC Health Department, buy a government certified fire extinguisher, get a contract for waste disposal, and complete many more mandated steps. Finding property in NYC is another problem altogether. Crippling government regulation makes construction many times more costly in the big apple than in Hong Kong or Beijing, slowing the growth of the skyline and increasing costs for those looking for space. As a result, more people are content with finding a job working for someone else who deals with the regulatory mess for them. Predictably, youth entrepreneurship in the United States has been dropping. When people find it harder to take their ideas to market, fewer products are invented, and everyone suffers, from the would-be business owner to consumers who would buy the product, all the way to workers who would see their services in greater demand.
Regulation not only prevents new businesses from starting but also adds to existing businesses’ operating expenses. The total cost of regulatory compliance to the economy in 2014 was $1.88 Trillion, more than the GDPs of Canada and Australia. Manufacturers spend roughly $20k per employee on regulation, and the costs decrease as the company grows larger. Politicians who use regulatory measures to punish big business only hurt smaller competitors to those businesses. Nearly two thirds of firms surveyed by the Small Business Administration reported that they faced more than minor regulatory burdens, and a quarter of them claimed that the burdens were “substantial.” Small businesses also innovate more than larger corporations, filing sixteen times more patents. The cost of excessive regulation effectively acts as a tax on all households in America as the cost is factored into families’ paychecks and the price of goods. The federal government spends almost $60B on enforcing these regulations, enough to build Trump’s border wall (estimated at $8B by Trump himself) in addition to 34 bridges equivalent in size to the Goethals Bridge currently being replaced in NYC ($1.5B). These operating costs force companies overseas where they have an easier time legally producing what companies have traditionally made in the United States and makes the companies that stay in America less competitive.
The bureaucracy has steadily added miles upon miles of red tape and now has grown to a point unprecedented in American history. Among the six all-time highest Federal Register page counts, five have occurred under President Obama. The number of new regulations put in place far surpasses the number of laws passed by Congress. Regulations have become a way for the government, specifically the executive, to unilaterally impose its will on citizens without going through Congress. They mandate that corporations do things that the government cannot provide, and where the bureaucrats cannot mandate, they incentivize. Because there are so many regulations in place, businesses cannot possibly be expected to follow every single one to the letter of the law, especially when considering that some regulations can be interpreted differently.
In 2014, motor vehicle accidents killed more American teenagers than any other cause of death according to the CDC. Auto manufacturers are incredibly regulated, but the government will not ban cars or regulate them so heavily as to kill the industry altogether. Of course, cars provide incredible good in the lives of all Americans. The predominant fear is not that the government will kill an existing industry but rather that it will kill the next great innovation. The automobile revolution has gone and passed, but drones, for example, are struggling to get off the ground in America, and if they cannot succeed under the U.S.’s laws they will succeed under the flag of another country. While drones, like other new technologies, do have risks associated with them, making them completely safe is unrealistic, and the government must be able to accept some of that risk. Red tape in America is killing entrepreneurship, exacts incredible costs on businesses, and is growing by the minute. Without ending this era of big government, the stacks upon stacks of regulation will continue to create a sluggish American economy where jobs are shipped overseas, inventions are created somewhere else, wages are low, and jobs are scarce. It is the greatest challenge facing the American economy.
