April 2009

Regulations - the final stake in the heart of the economy

By Glenn Nielsen

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There is growing dissatisfaction with where Democrats and Republicans have led this country. The recent Tea Parties show there is vocal opposition to the federal government bailouts of the financial industry, auto manufacturers and unprecedented federal spending.

Huge federal budget deficits are predicted which will result in monetary inflation and higher taxes. The first bill President Obama signed included a large increase in taxes on tobacco products and now there is talk of adding a new tax, the Value Added Tax, or VAT. A VAT taxes the increase in value in each step in production of a product and is a huge bureaucratic nightmare.

Government interference in the free market and the federal reserve keeping interest rates artificially low are the root cause of the housing bubble and our current economic crisis.

More of the same failed policies which caused this economic crisis will not lead to economic recovery.

In addition to bailouts, huge budget deficits and taxes; government regulations also do great harm to our economy and will make it even more difficult for the small farmer or business to make an honest living.

Here are some of the recently passed or proposed regulations which do great harm to you and the economy:

Cap & Trade - Cap and trade on carbon emissions

To reduce CO2 greenhouse gas emissions in the name of fighting global warming, government issues carbon credits to industry but restricts the number of these credits to reduce the amount of carbon emissions. These carbon credits can then be traded in a financial market between businesses. Cost to the end consumer range from $800.00 to $3,100.00 annually. In addition this will make products manufactured in the U.S. more expensive making it more difficult for U.S. manufacturers to compete in the global market.

CPSIA - Consumer Product Safety Improvement Act

To protect us from some isolated incidents of products for children from China which were tainted with lead the CPSIA was passed in 2008. The new regulations are so broad that libraries are having to remove old children's books from their shelves, youth motor sports for children twelve and under are being put out of business and small handcrafted toy makers will be put out of business.

FSMA - Food Safety Modernization Act

In the name of food safety, to protect us from a few isolated incidents of contaminated food, the federal government would require burdensome regulations and paperwork at every level of food production. Some even fear that it will reach down all the way to small organic farms and farmer's market's.

NAIS - National Animal Identification System

Congress never passed a bill to require NAIS. Instead it was created as a new regulation by the USDA without any vote by your elected member of Congress. NAIS creates new regulations for registering your premise, tagging of 33 or more species of farm animals and finally require that you report movements of the tagged animals. These regulations add significant costs and burdensome paperwork that makes it even more difficult for a small farmer or rancher to make a living.

CAFE STDS - Corporate Average Fuel Economy Standards

Cafe Standards have been around since the 1970's. These regulations specify the average fuel economy for all autos sold by an auto manufacturer. The current energy bill in Congress includes a large increase in the average fuel economy for auto's. This can only result in even more financial problems for U.S. auto makers and add an estimated $1,300.00 to the cost of a new car.

Politicians talk about how they can't sit back and do nothing, how only government can save the economy. Yet they continue to pass laws and promulgate new regulations that only hurt you and our economy.

Behind the scenes, large corporations often support these new regulations. Why? A large corporation can absorb the regulatory costs but it will make it even more difficult for small businesses to compete with them.

So many problems in our society have been caused by government interference and by the unintended consequences of new laws and regulations. Yet politicians and bureaucrats will never admit they are the source of the problem. They always blame something else, like the free market, then pass more laws and regulations claiming they are fixing the problem. One which they created in the first place.

Libertarians oppose all of these burdensome laws and regulations which benefit large corporations and harm small farmers and business.