It’s the year 2016, and there’s still one very basic economic principle that “fiscal conservatives” and so-called “free market” Republicans refuse to understand: Regulations are good.
And they aren’t just good for you and me. They’re actually really, really good for the economy as a whole. And really, when you think of it, that just makes sense.
Just like you wouldn’t enjoy a football or baseball game without rules for the game and umpires and referees to implement and enforce them, we similarly don’t want people or companies engaging in the game of business, particularly when those businesses produce physical or economic poisons, without specific rules and referees to protect the public.
If you ask any Republican though, they’ll tell you that Democrats should never be elected because Democrats support “business killing regulations.”
Republican politicians actually put their hatred for regulations and regulatory agencies at the center of their platforms, and they use it to bolster their credibility as anti-American-government fiscal conservatives.
Back in 2012, Rick Perry tried to make the case during a Republican debate that the so-called “free market” could work its supposed magic if the federal government just did away with three agencies, and he almost remembered all three of them.
Ted Cruz one-upped Perry this year in the Republican primary by offering to abolish four agencies, and he’d even abolish the Department of Commerce twice.
Those gaffs were entertaining during the Republican debates, but now Donald Trump is the Republican nominee, and he’s been saying for months that he wants to do away with environmental protections.
But the fact is, Trump and the anti-regulation Republicans are flat-out dead wrong about regulations, and especially environmental regulations.
Dr. Joe Romm at ClimateProgress points out that cutting the Environmental Protection Agency (EPA) might increase Gross Domestic Product (GDP), but he also points out that GDP is a terrible measure of a country’s true economic well-being. And that’s not a new opinion; that’s what Robert Kennedy pointed out in a speech at Kansas University shortly before he was assassinated 48 years ago.
Coincidentally, the very agencies that protect our children’s health and assure their educations are the same agencies that Trump and the other anti-American-government Republicans want to eliminate to “save costs” and “shrink the budget” to make space for more tax cuts and tax loopholes for billionaires.
The truth is though, that government investments in new regulations from agencies like the EPA, the Department of Health and Human Services and the Department of Energy actually create hundreds of billions of dollars more in benefits for the general public than they cost. According to the Office of Management and Budget, the total cost of 120 rules that 10 agencies implemented over the 10-year period between 2004 and 2014 was between $68 billion and $103 billion, based on the value of the dollar in 2010.
That may seem like a lot, but at most it’s only about one-sixth of what we spent in 2015 on the military. And the cost of regulation is a drop in the bucket compared to the benefits from regulation. According to the report, that $103 billion in costs created up to $981 billion in real, measurable benefits like healthier children. That’s nearly $1 trillion in benefits that the United States got for a price tag of only $100 billion, which means that the United States got a return of $10 in benefits for every $1 spent on new major regulations between 2004 and 2014.
The Department of Health and Human Services, for example, passed 16 new rules that cost up to $4.9 billion and created up to nearly $36 billion in benefits for the economy between 2004 and 2014, meaning that those regulations created $7 in benefits for every dollar spent on implementation.
The Department of Energy, a favorite target of anti-American-government conservatives, passed 20 major rules which cost the government only $9 billion between 2004 and 2014, and those rules created up to $29 billion in benefits for a rate of return of more than $3 for every dollar spent.
The EPA though, is far and away the best investment in terms of regulatory agencies. The EPA put 32 major rules in place that cost up to $45.4 billion over the 10-year period covered in the report, and those 32 major rules created up to $788 billion in benefits for the United States. That’s an incredible return on investment for the United States economy of nearly $20 for every dollar spent on EPA rules alone.
So when anti-American-government Republicans like Ted Cruz, Rick Perry and Donald Trump start talking about how regulations are bad for the economy and how the EPA stifles growth, it’s important to remember that they aren’t talking about the economy as a whole. They’re only talking about the impact on private corporate profits and returns for shareholders. Because that’s all they care about.
The fact is, anti-government Republicans would rather those costs be spread around to society in the form of unbreathable air, undrinkable water and illiterate children, because with fewer regulations and a less educated work force, they can pocket more in profits and pay out more in dividends to shareholders.
It’s time to end the myth that regulations hurt the economy. The truth is, passing smart federal regulations is one of the best economic and social investments that we can make as a country.