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Pros and Cons of Government Regulation on the Economy
Transcript of Pros and Cons of Government Regulation on the Economy
Types of Government Regulation
Social: "refers to the broad category of rules governing how any business or individual carries out its activities, with a view to correcting one or more market failures.”
Economic: "refers to rules that limit who can enter a business (entry controls) and what prices they may charge."
Examples of Government Regulation Agencies
The Securities and Exchange Program
Office of Comptroller of the Currency
The Federal Deposit Insurance Corporation
The National Credit Union Administration
The Federal Aviation Administration
Federal Motor Carrier Safety Administration
The Federal Communication Commission
Food and Drug Administration
Environmental Protection Agency
Pros of Government Regulation
It looks out for the safety of consumers.
It protects the safety and health of the general public as well as the environment.
It looks after the stability of the economy.
Keeps in mind the well being of the people.
Cons of Government Regulation
It creates a huge government bureaucracy that stifles growth.
It can create huge monopolies that cause consumers to pay more.
It squashes innovation by over-regulating.
Is extremely costly to the tax payers
Ex: U.S. tax payers pay nearly $55 billion per year to fund the 300,000 regulatory staff and their various activities.
Difficult to calculate success of operations.
Is Government Regulation on the Rise?
How Costly is Government Regulation?
Government regulation cost American $55 billion per year.
Annual expenditures that U.S. business must comply by cost $700 billion per year, and this only takes into account explicit cost.
Additional cost could amount to almost $300 billion per year
Aside from the money aspect of government regulation, there are several other vital cost.
Many people find it difficult to run a successful business with such harsh regulations.
It can be difficult to follow one government regulation with out breaking another.
Yes. Over the past 50 years Government Regulation has gone from less than 5 billion dollars a year to over 55 billion. More than 5,000 new federal and state regulations are added each year. It is also predicted that by the end of President Obama's term government regulatory spending could top over 73 billion dollars annually.
Economics Today. The 17th addition
The Business Insider http://www.businessinsider.com/ridiculous-regulations-big-government-2010-11?slop=1#and-thats-just-the-start-14
Recent Government Regulations
The U.S. Food and Drug Administration is projecting that the food service industry will have to spend an additional 14 million hours every single year just to comply with new federal regulations that mandate that all vending machine operators and chain restaurants must label all products that they sell with a calorie count in a location visible to the consumer.
In the state of Texas, it doesn't matter how much formal interior design education you have - only individuals with government licenses may refer to themselves as "interior designers" or use the term "interior design" to describe their work.
Federal agents recently raided an Amish farm at 5 A.M. in the morning because they were selling "unauthorized" raw milk.
The state of Louisiana says that monks must be fully licensed as funeral directors and actually convert their monasteries into licensed funeral homes before they will be allowed to sell their handmade wooden caskets.
Why Cant Chuck Get His Business Off The Ground?