Tags: Karlgaard | regulation | US | economy

Forbes' Karlgaard: Government Regulation Has Stolen US Wealth

By    |   Tuesday, 07 October 2014 01:07 PM

The real cost of government is stunning, and the United States would likely have immense riches if not for its heavy hand, according to Forbes publisher Rich Karlgaard.

By way of illustration, Karlgaard explained that if the U.S. economy were giving up only 2 percent growth annually since 1949 because of bad government policies — perhaps a modest amount compared with reality — the math of compound interest would reveal unexpected lost wealth over the years.

"But run the numbers yourself — and prepare for a shock. If the U.S. economy had grown an extra 2 percent per year since 1949, 2014′s GDP would be about $58 trillion, not $17 trillion," he wrote, citing a study published in the Journal of Economic Growth.

In fact, the study found that more than taxes, it's actually been runaway federal regulation that has stunted U.S. growth annually for more than two generations.

Even if government regulation retarded U.S. economic growth by only 1 percent annually since 1949, without that drag 2014 GDP would still be $32 trillion.

"Per capita income would be $101,000, not $54,000," Karlgaard argued. "Per capita wealth would be $480,000, not $260,000. It would probably be higher than that, since savings rates might be higher."

Moreover, he proclaimed, "The U.S. would have no federal, state or municipal debts or deficits. Pensions would be solid. So would Social Security."

Karlgaard said if Americans want to cut government's drag on U.S. economic wealth, they should elect politicians who rethink regulation rather than propagate it.

"This might sound like a conservative partisan plea. It's not. John F. Kennedy, Ronald Reagan and Bill Clinton — two Democrats and a Republican — were the best presidents since 1949 regarding regulation (by 'best' I mean that these three presidents allowed regulation to grow the least). The three worst: Harry Truman, George W. Bush and Barack Obama."

Gary Halbert, publisher of the Forecast & Trends E-Letter, noted the federal government issued more than 3,600 new regulations in fiscal 2013.

Halbert cited estimates that regulatory burdens cost the U.S. economy as much as $2 trillion per year.

"This is regulatory overkill, and it's no wonder then that this economic recovery is so weak," he wrote.

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The real cost of government is stunning, and the United States would likely have immense riches if not for its heavy hand, according to Forbes publisher Rich Karlgaard.
Karlgaard, regulation, US, economy
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2014-07-07
Tuesday, 07 October 2014 01:07 PM
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