The United States has become less competitive internationally and government regulations are a major factor, according to a report by the Mercatus Center at George Mason University.
“The available evidence indicates that U.S. international competitiveness has deteriorated by certain measures and suggests that future—and potentially more economically significant—declines may be anticipated,” the study concluded. “Evidence also identifies deterioration in the U.S. regulatory environment relative to other developed economies.”
President Obama has said contradictory things about the impact of regulations on the economy. In an interview with “60 Minutes,” he boasted of keeping regulations in check.
“When it comes to regulations,” he said, “I’ve issued fewer regulations than my predecessor George Bush did during that same period in office. So it’s kind of hard to argue that we’ve overregulated.”
Then thirty seconds later, however, he suggested that Bush deregulated and that this was harmful to the economy.
“And, you know, the problem that Gov. Romney has is that he seems to only have one note: tax cuts for the wealthy and rolling back regulations as a recipe for success,” Obama added. “Well, we tried that vigorously between 2001 and 2008. And it didn’t work out so well.”
Regulatory costs have exceeded $488 billion under the Obama administration alone, says Sam Batkins of the American Action Forum. He writes, “The administration has created $70 billion in regulations in 2012 alone,” and concludes the $488 billion figure from the Government Accountability Office is a floor, not a ceiling, on the overall Obama regulatory burden.
The most costly regulatory agencies under the Obama administration have been the Environmental Protection Agency and the Department of Health and Human Services.
Other researchers say current policies have led to be less economically free relative to other countires. In a newly issued report by the Fraser Institute, the United States dropped to 18th most economically free, from a peak of second in the world in 2000. One of the primary reasons cited in the study was growth in the size of government.
“Things like TARP and the bailouts, have all contributed to the decline of scores in areas one and two,” report author Joshua Hall explained to The Daily Caller News Foundation.
The Mercatus study compares U.S. regulatory policies to other member countries in the Organisation for Economic Co-operation and Development.
“In 2005, only one OECD country ranked superior to the United States in terms of ‘business freedom’—the ability to start, operate, and close a business. In 2011, eight countries ranked superior to the U.S.,” indicating that regulation is becoming more onerous.
Since 2005, the U.S. has declined by a variety of measures, including protection of property rights, number of days to start a new business and likeliness to relocate a business from the United States.
“In 2005, only two OECD countries were ranked as having better protection of property rights. By 2011, 14 of
the 17 other OECD countries were rated as superior to the U.S.,” the study continued.
“While the U.S. maintained an advantage in productivity growth over all other OECD countries from 1996 to 2010, the extent of its advantage has been shrinking over the past 5 years.”
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