The Octopus in the Room

Posted on September 14, 2006 | Author: Arwynn Mattix
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This past session, the legislature created or continued more than 25 agencies, regulating everything from private postsecondary education to adult foster care homes. But well-intentioned regulations often make things worse, not better, for consumers. 

Complying with extensive regulation means businesses operate at higher costs, which can translate into higher prices for consumers and fewer jobs for workers. 

In 2005, federal regulatory costs reached an estimated $1.13 trillion according to the Competitive Enterprise Institute. To put that into perspective, the cost of regulation in 2005 was nearly half the amount of all federal spending that year.  State regulations exacerbate that burden. 

Government imposed regulations aren't the only way to protect consumers.  Groups like the Better Business Bureau and private imprimaturs like the Good Housekeeping Seal of Approval provide information to keep consumers informed and safe. 

The Legislative Report Card shows government reaching its tentacles into areas that should be left to markets and private associations.  The average Arizona senator scored a D- in regulation and the average representative scored an F+, meaning both chambers have ample room for improvement.

Arwynn Mattix is a research assistant at the Goldwater Institute.

Key Links:

-Competitive Enterprise Institute: "Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State"
-Institute for Policy Innovation: "Barriers to Entrepreneurship: How Government Undermines Economic Opportunity"
-Cato Institute: "Private Regulation: A Real Alternative for Regulatory Reform"

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