Prof Bruce Yandle – Clemson University
There is more to the U.S. problem than Europe or even the past recession. There is a bias toward redistribution woven deeply into the economy’s fabric, a bias that works against productivity gains, innovation, and wealth creation. And it did not begin with Mr Obama or with Mr Bush, though their administrations strengthened the bias mightily.
The redistribution disease seems to have begun in the very early 1970s, perhaps in 1970 when Richard Nixon severed the dollar from gold.. It was then that the U.S. went on an amazing deficit binge. This was accompanied by a regulatory rush that gradually yet systematically introduced endless rules and constraints on how we work, what we produce, where we can produce, how we market things, and how we hire, just to name a few of the major rule categories.
Funded with deficit dollars, the regulatory establishment was able to grow more rapidly than federal revenues. From 1970 to the present, 2.5 million pages of new and modified rules have been published.
New pages in the Federal Register form a proxy for regulation growth. And the number of annual new pages divided by real GDP is a proxy for the overall economic burden of those rules. . Can an economy, even a strong market economy, digest this much government regulation without choking or at least sputtering?