How Do You Spell American Failure? R-E-G-U-L-A-T-I-O-N

If you knew that a primary source of your problems was over-regulation of your life, would you care? Well, it is. For those of you who already realized this--never give up in thinking that you can get government to stop trying to suck you dry.

We're going to play a word association game. I'll ask a question, and you give me a one-word answer. Question #1:

Why are so many people losing their jobs? Why is it harder for this generation to make ends meet?

Did you guess regulation? Excellent! The New American shows the numbers behind the pain.

The U.S. economy, once a flourishing free-enterprise colossus, is now a dying Gulliver, thanks to thousands of strangling Lilliputian regulatory cords.

“The total regulatory burden on manufacturers is estimated at $162 billion,” the National Association of Manufacturers reported... “This represents an increase of 10.2 percent since 2000,” NAM reported, noting that this burden is a major contributing factor to the continuing loss of American manufacturing jobs to overseas competitors, as well as an ongoing impetus for U.S. manufacturers to move offshore — or perish.

However, the NAM calculations do not begin to tell the whole story of the horrendous havoc that the regulatory state is wreaking upon our economy. According to the Competitive Enterprise Institute (CEI), the total federal regulatory burden to the American economy is closer to $1.16 trillion annually!

How come I can't get health insurance? Why is the health care that I get not very good?

Sally Pipes explains why, using the specific example of Mitt Romney and Massachussetts refusing to face the real problem.

Thanks to state-imposed regulations requiring companies to charge the same rates to the sick and the healthy, individual health insurance is not always a good deal in Massachusetts, at least for those who are young and healthy. The result: Many people elect not to purchase health insurance, unless it’s provided at work at a deep discount or as a hidden cost.

The gutsy attack on this problem would be to figure out its real cause. It’s the price of insurance that prevents many from purchasing it, and the price is directly related to the government regulations that decimated the private market by prohibiting companies from charging fair prices for their products. Deregulation of the insurance market is required.

Why is may paycheck so much smaller than I expect every month?

Here is a succinct explanation of largely why.
If you work for an employer, 6.2% of your wages is withheld and your employer deposits the withholding, along with its 6.2% matching contribution, with the government for the social security programs. In 2007, the employee tax and matching contribution stop after the first $97,500 of wages. In addition if you work for an employer, 1.45% of your wages is withheld and the employer makes a matching 1.45% contribution to the Medicare program, making the total withholdings at 7.65% [for both you and your employer].

7.65% + 7.65% = 15.3%. If your salary is $50,000 and the government weren't 'taking care of you', your salary would actually be somewhere in the neighborhood of $54,000 (because your employer could afford to pay you 7.65% more than they currently do). Additionally, you would see about $4,000 more per year in your paycheck (because you wouldn't be being forced to shove it down a rathole).

If you want things to be better, ask government to stop taking care of you. It is a recipe for failure.


  1. Balderdash! Properly conceived regulation saves us money. All we have to do is look at the dead pets from bad pet food made with poison from China. All we have to do is look at children who suffer permanent brain damage from toy trains that have lead paint. All we have to do is look at the tens of thousands of investors swindled by Enron.

    I also promise that your salary would decrease without regulation. No minimum wage -- no floor. No labor unions -- no group of workers demanding higher salaries and better benefits.

    Don't believe me. Defined benefit pension plans have never been provided to workers in the Western United States at the rate they are in other parts of the U.S. where unions have a higher percent of the work force. Our wage rates are lower here, too.

    As for Social Security and Medicare, they are insurance programs. They have worked remarkably well. Poverty among the elderly, orphans, widows, and the disabled are at significantly lower levels than during the period before Social Security.

    I challenge you to listen to the Marketplace report last week with the CEO of Yankee Candles who said that the extra regulation of Sarbanes-Oxley had cost his company a great deal in added accounting costs -- but he was thrilled. Without the push, he never would have done it and it has made his business much more efficient and given him the tools to allocate resources much more effectively and led to greater profits and better management.

    Of course, we should fight against regulations that do not bring efficiencies and savings. But most of these regulations protect the community against the individual interest. Sure the individual might make more money, but at what great cost to the rest of us in a manner that is hidden.

    Adding further insult to injury is the movement to cap damages for such bad actors.

    I count on government to say "no" to those who would steal, maim, and endanger me and my family for those who want unfettered freedom to do me harm unwittingly. And, then they have the audacity to insist that they not be held accountable.

  2. I didn't say anything about China in this post, but I have in previous posts. Regarding China and Enron, I agree with you. And I agree that some regulation is beneficial (But I specifically think that the three areas I discuss in my article are NOT beneficial.)

    I disagree that my salary would decrease. I oppose the minimum wage and am generally opposed to the shenanigans of labor unions, such as the ones that contributed mightily to the downfall of American automobile production.

    Apparently you haven't studied social security and medicare. They are failures, but because they have brought people to a precipice wherein they haven't planned for their retirement, people still clamor for them. At age 44 I would be glad to give up ALL contributions that I and my employer have made thus far if I could keep the 15.3% from now on.

    Sarbanes-Oxley is an albatross. There has been some talk in congress about repealing it or at least significantly streamlining it.

    I agree with your last 3 paragraphs.

  3. What's quite telling is that surveys regularly indicate that small businesses would rather have fewer regulations than decreased taxes. Hmmm.


Post a Comment

Thank you for commenting. If you have a Google/Blogger account, to be apprised of ongoing comment activity on this article, please click the "Subscribe" link below.

Popular posts from this blog