Strengthening Constitutional Self-Government

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Let's Make a Deal?

As the super committe negotiating how to move closer to a balanced budget moves along, it might be time to get creative in suggesting solutions.  To that end, I have a thought.  If the Democrats are dug in, demanding tax hikes, the GOP could accept some tax hikes (provided they are of the sort least likely to hurt the economy--not all taxes are alike after all). In return, the Democrats would agree to the repeal of a host of regulations, and fire many of the people who currently are employed by the government to create and enforce regulations. That last step would, of course, produce additional savings.

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Discussions - 14 Comments

But it's a lot easier to grow regulations than to let the economy grow....

produce additional savings.

Not a whole lot. It is a signature of regulatory agencies that they have small budgets. The FCC and the EPA have generous budgets (> $8bn per annum), but only a modest fraction of their expenditures are devoted to generating and enforcing regulations (somewhat over a tenth in the case of the FCC and somewhat under in the case of the EPA; the rest goes to subsidies and works projects). The sum of expenditures for generating and enforcing civil regulations accross all agencies does not exceed about $20 bn.

The operating budget of the IRS is about $13 bn. The federal police and prisons consume about $70 bn; federal courts and legal counsel about $9 bn.

Every little bit helps. There's also the long-term pension obligations for such workers.

Does the regulation have no cost to those it regulates?

You are assuming that all of that regulation is necessary and that all of those regulators are necessary, so that the expense is necessary. Meeting the various obligations of the various regulatory agencies is a drag on the economy. Businesses must hire employees to cope with the paperwork and meeting the terms of regulations and those expenses are passed on to the consumer and make American products less competitively priced in international markets as well as our own in competition with products from overseas. There are expenses to the nation beyond what you indicate, AD, although even that -- they have small budgets; it's only billions. Great.

I am assuming nothing. His reference was to public expenditures, not to deadweight loss from poorly conceived regulation. The latter is, of course, much more difficult to calculate.

AD, yes, and even in public expenditures, a billion here and a billion there and pretty soon you are talking about real money.

Constructing and maintaining a regulatory architecture is an inherently public function. The regulations may be well-constructed or ill-constructed, but regulations there need to be. Building financial pipelines (large or small) to favored constituency groups is a corruption of public functions in most cases (and a much bigger part of the budget). Scraping barnacles off the lattice of regulation is a good thing (though it may or may not render enforcement cheaper). However, before I would be inclined to review the budget of the Food and Drug Administration line by line, I would be inclined to turn off the spigots to agribusiness, higher education, real estate, and the social work industry. Just getting rid of telecom subsidies will save you a sum of money equal to about 40% of all that budgeted for generation and enforcement of civil regulations.

I don't know about that, about the necessity of "a regulatory architecture" as public function. Why couldn't regulatory agencies be privately funded and operated as non-profits? Many industries additionally have such associations to maintain standards. Establishing standard weights and measures in a general way are certainly the function of a national government.

(True standardization only became possible with machines. Anyone who tried to restore an older home knows that some standards change over time, as well.)

For example, the FDA hasn't really reduced quackery, for example. Call a substance a "food supplement" and it is unregulated although it has chemical effect on the body. Heck, bad drugs pass FDA tests and kill people and there are good ones that are curing people in other countries yet held here for 5-10 years tangled in procedural delays or held up for reasons unclear to the public. People say about the FDA, "Better with it than without it". How do we know? If we prosecuted the purveyors of drugs that kill or harm, publically executing those responsible, we might get the same net effect for the public. Sometimes the FDA functions as legal cover for businesses. Who can argue with "FDA approved"?

But doing without such agencies is speculative blather -- I admit it. We have these "public functions" and I am willing to contain their excesses in whatever order you like. We can dream can't we? Reining them in seems about as likely as abolishing them.

Incidentally, would point out that agribusiness has great influence on and in the FDA, which controls some of the spigots you mention. Do telecom subsidies cost us that much? I believe it.

They should not give in on taxes for any reason. The principle is simple - you do not raise taxes in a deep recession (and that's what we've been in, regardless of what they say). Given the fickleness of the American voter, who will blame the GOP for automatic cuts, I'm sure they will cave, though.

Sadly, I think this country is done -- it will take a few more decades, but the moral virtue of the people has been destroyed by insidious socialism. When parasitism becomes SOP, the system is not long for the world.

Self-regulatory schemes are cartelistic practices and require enforcement by state agencies.

For example, the FDA hasn't really reduced quackery, for example.

Who sold you that idea?

Sovereign default will be most amusing. Thank god we did not cave on taxes.

good

AD, the news and Internet advertising.

Why should there ever be sovereign default? (On the level of the federal gov., still upholding the relevant distinction between California and Greece.)

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