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Author: bcairns Big funky green star, 20000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1976045  
Subject: Cost of Regulation Date: 11/27/2012 7:34 PM
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So far, no decent rebuttals to my short GOP platform. Peter's was the only serious response. You're a cut above, Peter. Regarding your question on regulation, check this out.

http://www.zerohedge.com/news/cost-government-regulation-175...

In their Ten Thousand Commandments 2012 report which was released in June, the CEI estimates the cost of US government regulation at $US 1.75 TRILLION. That is just under half (48 percent) of the budget of the federal government. It is almost ten times the total of all corporate taxes collected and almost double the total collected from individual income taxes. It is also one-third higher than the total of all pre-tax corporate profits. It is the hidden cost of doing business in an interventionist economy. The fact that the cost of complying with these regulations is substantially higher than the total of corporate profits is a stark illustration of the end result of economic intervention. That end result is capital consumption.

For the record, here's a re-post of my winning GOP platform.

Immigration: We need a strong national ID system. Many in the GOP will hate it, but we need to know who is allowed to be here.

Taxes: Flat tax on income less saving with a large exemption. Effectively, this is tax on consumption which is the economically correct thing. As with immigration, there's probably a tough pill to swallow. In this case, the pill is that we probably need to keep the tax on large gifts (death tax). Also, we should probably eliminate the payroll taxes and stop pretending there is a link between these and benefits.

Regulation: This is a HUGE tax on EVERYONE. Nuff said.

Healthcare: We need an alternative that recognizes political reality. IMO, we will end up with health insurance vouchers or we will end up with something much worse.

Social Security: Replace with forced funding of IRA's with very restricted investment choice.

Abortion: Stop fighting Roe. Fight at the margins, see partial birth.

Education: Choice, choice, choice. This is a winner.

Color bindness: It's the right thing and a huge club with which we can beat the Democrats.

Foreign policy: Screw the UN. That pretty much sums it up. That and we need to get after the difficult governments: China, Russia, Iran, Pakistan.
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Author: PeterRabit Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1840508 of 1976045
Subject: Re: Cost of Regulation Date: 11/27/2012 10:39 PM
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bc the CEI estimates the cost of US government regulation at $US 1.75 TRILLION.

Without questioning this estimate, I would ask:

What would be the cost of abolishing ALL US government regulations?

I suppose the answer depends on the value one places on human life.

Peter

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Author: bcairns Big funky green star, 20000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1840556 of 1976045
Subject: Re: Cost of Regulation Date: 11/28/2012 8:21 AM
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What would be the cost of abolishing ALL US government regulations?


Who cares? The important regulations don't cost very much. You need to recognize the problem. Until then, you are part of the problem.

In fact, your response IS the problem. You are supporting the insane, but sadly typical, position of the left, which is that even talking about wasteful regulation is evil and corporatist.

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Author: nigelwhalmsley Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1840570 of 1976045
Subject: Re: Cost of Regulation Date: 11/28/2012 9:50 AM
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"You are supporting the insane, but sadly typical, position of the left, which is that even talking about wasteful regulation is evil and corporatist."

No one has that position. What IS insane, however, is the ongoing bleat of "regulations are bad" coming from the Right, without any intelligent discussion at all. They never seem to offer any examples, just that 'over-regulation' is the cause of all of our woes. Incredibly stupid. Regulations are necessary, even vital, and are a key part of what makes America great.

Regulations SHOULD be monitored, measured, adjusted, improved, and removed when evidence shows that to be the best course of action. That is easy to say and hard to do. There is no doubt there are many wasteful regulations, but these can only be addressed on a case by case basis. "Get rid of regulations" is an extraordinarily dumb, broad brush statement, and is meaningless as anything other than a partisan war cry for idiots.

We now return to your regularly scheduled program.

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Author: PeterRabit Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1840577 of 1976045
Subject: Re: Cost of Regulation Date: 11/28/2012 10:03 AM
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bc You are supporting the insane, but sadly typical, position of the left, which is that even talking about wasteful regulation is evil and corporatist.

You talkin' to me?

Peter

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Author: jdp245 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1840598 of 1976045
Subject: Re: Cost of Regulation Date: 11/28/2012 11:23 AM
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Who cares? The important regulations don't cost very much. You need to recognize the problem. Until then, you are part of the problem.

Oh boy, where to begin? This is a woefully ignorant response to Peter's very apt question. Questioning the cost/benefit balance of any regulation is EXACTLY the analysis that should be done to consider whether that regulation is useful.

An example, that I hope we can agree on, would be the regulation of monopolies. Even the most dyed in the wool capitalist must recognize that market efficiency breaks down when monopoly power is exerted. Our society recognizes that monopoly power introduces an unnecessary cost into our economy, and has decided to regulate businesses to prevent the abuse of monopoly power.

That regulation provides a benefit to the economy by preventing monopoly power from being exerted and maintaining a more efficient market. However the regulation has costs. It costs the government money to draft, promulgate, monitor and enforce the regulations. It also costs businesses money to comply with those regulations.

So let's evaluate whether regulations against monopolies are good or bad. The question isn't whether the aim of the regulation is good or bad; nearly everyone would agree that the country is better off with more competition and less monopoly power. The question must be whether the cost of implementing, enforcing, and complying with the regulation is worth the benefit that it provides. But if the costs outweigh, or even largely consume the benefits of the regulation, the best solution is rarely to eliminate the regulation wholesale. An analysis should be done to see if there are ways to (1) decrease the compliance burden of the regulation and/or (2) increase the effectiveness of the regulation to provide a greater benefit.

This is exacly why your original post in this thread is flawed. You argue that this study's cited cost of regulation, $1.75 trillion, is evidence that the regulations should be eliminated. (By the way, the article you cite to falsely attributes this study to the Competitive Enterprise Institute. Their paper merely cites to the actual study, which was performed for the Small Business Administration, and can be found here: http://www.sba.gov/sites/default/files/The%20Impact%20of%20R...) Peter pointed out that you cannot make that determination unless you also consider the benefit of the regulation, and he is correct. I took the liberty to read the study you cite to last night, and although I find their methodology for generating these estimates to involve a lot of guesses about guesses (one "adjustment" they make in their methodology nearly doubles their resulting estimate), even they get the cost/benefit part right. They state explicitly: "Regulations are needed to provide the rules and structure for societies to properly function. This research, while mindful of this fact, does not consider the benefits of federal regulations, but looks at the overall costs imposed by them. Little stock is taken of the cumulative effects. . . . This report, thus, should be seen as a building block toward a broader understanding of the costs of regulation, much of which creates important and substantial benefits."

Your statement that "the important regulations don't cost very much" also shows a lack of understanding of the regulatory landscape. You should read my comment on your previous post to understand how regulations that internalize external costs are often the most important and beneficial type. http://boards.fool.com/regulation-this-is-a-huge-tax-on-ever... These regulations are often the most costly, but provide huge benefits. Take my example of the regulation of mercury in the air. The cost of compliance for this regulation is estimated to be $9 billion annually. However, it is also estimated to save $90 billion annually in healthcare costs.

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Author: bcairns Big funky green star, 20000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1840891 of 1976045
Subject: Re: Cost of Regulation Date: 11/29/2012 8:58 AM
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You talkin' to me?

Yep. If you don't comprehend that our regulatory structure is IMMENSELY wasteful, then you are part of the problem. And, apparently, you don't comprehend.

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Author: jdp245 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1840911 of 1976045
Subject: Re: Cost of Regulation Date: 11/29/2012 10:19 AM
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If you don't comprehend that our regulatory structure is IMMENSELY wasteful, then you are part of the problem.

By what measure? How can you possibly know that without accounting for the benefits that they provide? This position doesn't carry the day just because you, or some talking point, says it does.

I'll give you another statistic. The United States spent $1.17 TRILLION on purchasing food in 2010. The USDA estimates that 40% of all food purchased by Americans is wasted. By your logic, we should all just stop purchasing food.

But food is necessary, and provides the benefit of life to its consumers, you will say. We should all just find ways to cut down on waste of the food we buy.

But you cannot acknowledge the benefit of one (food) and ignore the benefit of the other (regulation), I will say. You naturally gravitate to a cost/benefit analysis in the case of food, because it is the correct way to think about the problem. But I'm afraid you are willfully disregarding, or have been programmed by propaganda to ignore, the fact that regulations also provide important benefits, and decisions about them cannot be made in broad strokes without due consideration of the benefits that they provide.

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Author: PeterRabit Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1840995 of 1976045
Subject: Re: Cost of Regulation Date: 11/29/2012 2:17 PM
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bc If you don't comprehend that our regulatory structure is IMMENSELY wasteful, then you are part of the problem. And, apparently, you don't comprehend.

If it is IMMENSELY wasteful, you should have to trouble coming up with some actual examples.

Peter

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Author: bcairns Big funky green star, 20000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1840996 of 1976045
Subject: Re: Cost of Regulation Date: 11/29/2012 2:29 PM
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If it is IMMENSELY wasteful, you should have to trouble coming up with some actual examples.

I could show you 100, and you'd agree with every one, and you'd still say it's not a big problem. I know this because you have managed to keep your head in the sand until now.

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Author: jdp245 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1840999 of 1976045
Subject: Re: Cost of Regulation Date: 11/29/2012 2:58 PM
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I could show you 100, and you'd agree with every one, and you'd still say it's not a big problem. I know this because you have managed to keep your head in the sand until now.

It is not a question of whether the 100 you show are problematic. I'm certain that you would be able to find twice that many, or more. The problem is that the Republican argument is that if there are 100 that are bad, we should get rid of all 10,000. That logic does not work. It only shows that we should get rid of the 100 bad ones that you identify.

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Author: PeterRabit Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1841000 of 1976045
Subject: Re: Cost of Regulation Date: 11/29/2012 2:59 PM
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bc I could show you 100, and you'd agree with every one, and you'd still say it's not a big problem.

Show me 10 (immensely wasteful regulations) and I will agree it is a big problem.

Peter

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