Impact of Excessive Government Regulation

721 Words3 Pages
Some believe the government regulates business too much others feel that the government does not do enough. I believe the government is regulating business far too much and furthermore putting businesses out of business and causing many workers to lose jobs. In this paper I will point out the common problems dealing with government regulation. I will also focus on three major aspects of government regulation which include: 1) regulation interferes with production by halting innovation and discouraging risk taking, resulting in declining employment, 2) government over regulates by setting standards for every aspect of manufacture when it could allow businesses to set overall objectives for their business, 3) regulation cost too much in business compliance, which is passed on to the consumer and finally forces the company out of business. The objectives of safety and health will better be achieved in the absence of government regulation. Government regulatory agencies have spent billions of dollars and there is little evidence that the world is any better off than it was without the agencies and costly reforms. When reading further ask yourself the question, does the costs or regulation outweigh the benefits, I believe they do not. Regulatory programs normally are started by a group of people with a single interest and pressure the government and people to believe that there is a major crisis, creating panic to an alleged problem. When this happens it pressures Congress to pass a reform law in fear of not being reelected. Media groups also aid in creating panic by focusing on the bad and not the possible solutions to fix the problem. What happens is Congress passes a reform that they have little thought over and create costly new standards that could make little difference in the world. A good example of this happened during the adoption of the auto emission standards of 1970. When Congress passed a bill with little debate and few people having any idea on what the bill was about, creating costly reforms and forcing cut backs on business expenses. In all of the cases of 1970 the Congress chose to regulate instead of the alternatives; court penalties for polluters, tax penalties for employers with poor safety records, or government-funded information programs. The health and safety regulators were created in response to a nonexistent crises, therefore it is not surprising they have made little impact. Sam Peltzman, University of Chicago economist, did a cost-benefit analysis of the drug regulations that followed the thalidomide tragedy in Europe. In his analysis he focused on the Food and Drug Administration (FDA) which is alike the older single-industry regulators and some of its problems are typical
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