Post Tue Apr 26, 2016 11:47 am

Federal regulations cost economy $4 trillion per year

If the federal government had issued no new regulations over the last three and a half decades, the economy would be 25 percent larger, the study said. That would translate into an additional $13,000 per year in the pocket of every American.

If the cost of regulations were a country, it would have the 4th highest GDP

"Endogenous growth theory builds on the idea that economic growth is primarily dependent on decisions made by actors in the economy—firms and individuals—rather than on external factors.

Economic growth is dependent on investment. Economic growth in a particular industry is determined by investment in knowledge creation, such as research and development, and the way that such investment leads to innovation and increases in productivity. This means that regulatory interventions that affect investment choices have a greater effect on the economy than the simple sum of static costs associated with regulatory compliance.

Regulations have cumulative effects. A key insight of endogenous growth models in general is that the effect of government intervention on economic growth is not simply the sum of static costs associated with individual interventions—there are dynamic implications. The accumulation of regulation over time leads to greater and greater distortion of investment choices. Moreover, the investment choices of previous years affect growth in future years because knowledge that is not created cannot be implemented next year and the years after to be more productive."