Regulations Crippling US Economy with Hidden Costs

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A recent small business administration study reveals that it now costs a small firm more than $10,000 per employee to comply with all the federal regulations.

And those regulations cost the entire nation $1.75 trillion a year, almost double what Americans pay in income taxes each year.

Author Phil Kerpen looks at how such regulation is crippling the economy, in his book, Democracy Denied: How Obama is Ingnoring You and Bypassing Congress to Radically Transform America.

"It's just not that our tax dollars are wasted paying for these bureaucracies, it's that the bureaucrats in these bureaucracies are causing an awful lot of mischief," Kerpen said.

Leslie Paige, media director for Citizens Against Government Waste, said it's easy to measure how much the federal government spends, but the more hidden cost is what damage all those government regulators do.

"Smothering businesses, making it very difficult for anyone to do anything in this country. And they have grown like kudzu," she explained.

Kerpen said the Phoenix Center, a think tank in Washington, D.C., has put exact numbers to the economic damage.

"They found that each federal regulator destroys an average of 98 private sector jobs per year," he said.

And each federal regulator wipes out about $6.2 million in economic output each year.

"So when you talk about spending, it's often far more costly than just what we spend on the budgets of these agencies because of the reach they have into the private economy and the negative impact that they have," Kerpen explained.

"When you see the amount of intrusion of the federal government into this economy and in the lives of Americans at every level, it's kind of frightening," Paige said.

"These busy bodies who are being paid with our tax dollars are spending all day long interfering in the private economy, and that has a very real, very negative cost associated with it," Kerpen said.

The same study found that cutting the budgets of the federal regulatory agencies just 10 percent would add about $150 billion to the gross domestic product every year.

It woudl also increase the creation of private jobs by 2.5 million or so a year.

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Paul  Strand

Paul Strand

CBN News Washington Sr. Correspondent

As senior correspondent in CBN's Washington, D.C., bureau, Paul Strand has covered a variety of political and social issues, with an emphasis on defense, justice, and Congress.  Follow Paul on Twitter @PaulStrandCBN and "like" him at