Monday, April 5, 2010

Morning Bell: Red Tape Rising

If you have ever worked in the financial department of a public or private corporation, you can relate to the volume of paperwork required by the government. You also suspect that very little of that is processed unless a specific problem arises. I remember a story about an antitrust suit against RCA many years ago. As the story goes, RCA hired 1000 law students to prepare all pertinent paperwork for submission to the Government. It took many months and 18 boxcars to deliver it. I was an employee of RCA at the time and the numbers are a little foggy, but you get the idea. I'm sure almost none of that info was ever read.

Wouldn't it be nice if Government would just get out of the way and let the laws of supply and demand take over. We would then get the increase in the economy necessary for full employment.

In addition to the federal government’s explicit taxes and spending, Americans are also burdened with a slew of hidden taxes imposed by an ever-increasing number of regulations. More than 50 agencies have a hand in federal regulatory policy, enforcing more than 150,000 pages of rules. Many of these regulations provide needed benefits. Most Americans would agree on the need for security regulations to protect citizens from terrorist attacks, although the extent and scope of those rules may be subject to debate. But each regulation comes at a cost–a “regulatory tax” imposed on all Americans. According to a 2005 study commissioned by the Small Business Administration, the cost of all regulations then on the books was some $1.1 trillion per year. Read The Foundry article here.

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