11A108 The Dead Hand by Jim Davies, 4/21/2011    

Yesterday's ZGBlog referred to "the forest of regulations that throttle business" and right on cue, the Competitive Enterprise Institute published its annual estimate of what the dead hand of government costs, in terms of its regulations we are forced to obey. That is all extra to the cash cost of paying its bureau-rats to administer those rules - all that is included in the published spend, of $3.7 trillion in the FedGov's case and another three or four trillion by its State and local cousins. The CEI is trying to meaure the cost of complying with the rules - the weight of the ball and chain, if you will, that government locks on to the ankles of people and companies after all those taxes have been paid. Their 2011 report can be read here and the bottom line is that for this year, the figure is over two trillion dollars.

The CEI advertises that it favors "free markets and limited government" so is unfortunately revealed at the get-go as being irrational. Those two things are diametrically opposed; if a market is truly free there cannot be any government at all, and if there is a government then the market isn't free. Further and more fundamentally, it is impossible for a government to be limited; if some organization is limited it's not a government (whatever does the limiting would be) and if it is truly a government then it is not subject to limits, for "govern" means, govern. So there's some very loose thinking around at CEI. Nonetheless, the report is well written and can show us much. It was prepared by Clyde Wayne Crews and is titled "Ten Thousand Commandments" but that rather understates the regulatory burden - for the Federal Register alone has 81,405 pages, and that was for 2010. He estimates that there are 4,000 new rules every year and that since 2001 alone 38,700 new rules have been issued.

It's really hard to wrap the mind around the enormity of this chaos. Although it's about the only metric we have, "GDP", currently at $14 trillion, does not really measure US prosperity at all - because government "services" are included in it at cost! - whether or not they are wanted. A true measure would note what free people choose to buy, and add it all up; but the bland and ridiculous assumption made for GDP is that everyone would choose to buy all that government does, at the price it costs it to provide it. Ha! Would you gladly choose to purchase a $100 driver license, if it were advertised for sale without being forced to buy one? Or would you choose to contribute $5,000 to the government's wars in the Middle East?

Yet GDP is all we have. Government steals and spends half of it, $7 trillion, in taxes; and now the CEI reveals that another $2T is frittered away on having to comply with its rules. So what's left? - $5 trillion, of goods and services that may be so useful as to attract people to buy them without compulsion.

But wait: that (5/14 =) 36% of the economy isn't necessarily useful. It includes for example "higher education" sometimes provided by non-State academies but at prices high enough to freeze the blood. They teach what government directs them to teach. The result, their value, is very questionable. In a zero government society, the education market will be totally different; it will deliver serious value, yet cost but a tiny fraction of today's figure.

At present, I confess it's beyond me to figure out how heavily distorted is the whole economy of this society. At the very best, today, America is a limo with a finely-tuned, eight-cylinder engine somehow sputtering along on three. It is truly remarkable that even so it ranks as the world's richest, and that speaks volumes for the giant leap in prosperity that will follow the total removal of the dead hand of government.

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