How Much Regulations Are Too Much?

[Kathianne]

"The natural progress of things is for liberty to yield, and government to gain ground." Thomas Jefferson

http://www.sba.ca.gov/Cost%20of%20Regulation%20Study%20-%20Final.pdf


COST OF STATE REGULATIONS ON CALIFORNIA
SMALL BUSINESSES STUDY


Submitted by:

Varshney and Associates
2982 Aberdeen Lane, El Dorado Hills, CA 95762
sanjay@sbvarshney.com
(916) 799-6527


Authors:
Sanjay B. Varshney, Ph.D., CFA
Professor of Finance and Dean - College of Business Administration
California State University, Sacramento

Dennis H. Tootelian, Ph.D.
Professor of Marketing – College of Business Administration
California State University, Sacramento

September, 2009
...The study
finds that the total cost of regulation to the State of California is $492.994 billion which is
almost five times the State’s general fund budget, and almost a third of the State’s gross
product. The total cost of regulation results in an employment loss of 3.8 million jobs
which is a tenth of the State’s population. Since small business constitute 99.2% of all
employer businesses in California, and all of non-employer business, the regulatory cost
is borne almost completely by small business. The general equilibrium framework
yields the following results:

• The direct cost of the regulatory environment in California is $176.966 billion in
lost gross state output each year. The direct cost does not account for second
order costs.

• The total loss of gross state output for California each year due to direct, indirect,
and induced impact of the regulatory cost is $492.994 billion.

• In terms of employment this total output loss is equivalent to the loss of 3.8
million jobs for the state each year. A loss of 3.8 million jobs represents 10% of
the total population of California. In terms of labor income, the total loss to the
state from the regulatory cost is $210.471 billion. Finally the indirect business
taxes that would have been generated due to the output lost arising from the
regulatory cost is $16.024 billion.

• The total regulatory cost of $492.994 billion is four to four and a half times the
total budget for the state of California, and almost five to six times the general
fund alone. Further, given the total gross state output of $1.6 trillion for California
in 2007, the lost output from regulatory costs is almost a third of the gross state
output.
...

[MtnBiker]

Bloated inefficient government agencies.

Where is the confidence that government can "pay" for something by eliminating waste?

[Kathianne]

Bloated inefficient government agencies.

Where is the confidence that government can "pay" for something by eliminating waste?

Government and waste are synonymous, no?

[MtnBiker]

Very often, yes.

[crin63]

Bloated inefficient government agencies.

Where is the confidence that government can "pay" for something by eliminating waste?


Government and waste are synonymous, no?

All anyone has to do is look at the mess that is California and multiply that exponentially to see what we are headed for federally. California usually leads the way in hair-brained stupid liberal ideas which fail miserably, create waste (but a solid liberal voting block) and then become the gold standard for the federal government. Fortune 500 companies have been bailing out this sinking ship, millionaires and billionaires have been leaving in droves headed to states without state income redistribution, I mean without state income tax.

Last I saw we are at 12.3% unemployment.

Just the wasted money in construction was incalculable due to stupid government regulations. I'm not saying every regulation is/was bad but most are. Cal OSHA did do allot of good in California in the beginning but as with all things bureaucratic it grew into a monster and started wasting tremendous amounts of money.

[DragonStryk72]

Basically, it isn't a matter of regulating, or deregulating. We've tried those, they don't work, it's a matter of having simple, efficient, and WORKING regulations that we don't screw with every few months like we do now.

[crin63]

Basically, it isn't a matter of regulating, or deregulating. We've tried those, they don't work, it's a matter of having simple, efficient, and WORKING regulations that we don't screw with every few months like we do now.

Deregulation is just another lie with our government. Take the energy industry in California for instance. When we had the rolling brown outs and black outs the socialists blamed it on deregulation. The problem was that the state capped how much money the energy industry could make. They told them when to run their generators, when to shut them down and paid them for being on standby. The energy companies figured out that they could sell energy for more money in neighboring states or by being shutdown all together rather than actually producing and selling electricity. It showed once again what happens when government takes the incentive out of being productive.

[Mr. P]

Deregulation is just another lie with our government. Take the energy industry in California for instance. When we had the rolling brown outs and black outs the socialists blamed it on deregulation. The problem was that the state capped how much money the energy industry could make. They told them when to run their generators, when to shut them down and paid them for being on standby. The energy companies figured out that they could sell energy for more money in neighboring states or by being shutdown all together rather than actually producing and selling electricity. It showed once again what happens when government takes the incentive out of being productive.

Exactly!! It's also is a mirror of what happens with increased income taxes. Both result in a lack of revenue, which results in jobs lost and a decline in the economy.