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The Cato Institute’s Brian Mitchell on the impact of growing regulations on the American workforce.
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Thank god we don't have all those dumb laws in America though we have plenty and we're getting more.
And most people we ask want more -- slight guaranteed vacation.
-- -- -- -- -- -- And we're working every -- Absolutely and I think more so we were to Harden its country.
In France Italy elsewhere six weeks is -- But while America doesn't have mandatory vacation yet we do have.
All these laws -- 170000.
Pages of federal rules that you must still bad.
And they keep passing more look at this chart.
It shows how America has recovered from every recession since the Great Depression a fast recovery and every one except for the red -- That's the current recovery or non recovery should say.
I got this -- from economist Dan Mitchell at the Cato Institute.
And -- this recovery is slower.
Because partly because of all these rules.
You add up all the regulations and red tape all the government spending all the tax increases were about to get.
You can understand why entrepreneurs are thinking well maybe I don't wanna hire people on my do a higher than it sort of like the mass in Europe.
Where are well maybe they wanna make sure I keep my company small I don't wanna give them health insurance begins and -- -- -- the obamacare mandates.
I worry that we are becoming like Europe at exactly the same moment we're seeing that model fall apart.
And in the past we had horrible recessions.
And we have many of these laws but not as many.
And that allow that animal spirits of entrepreneurs to make a difference as much as I would like to deregulate it laissez Faire economy.
You don't need that you just need to make sure that you have about breathing room for the private economy to prosper.
Over time of government keeps growing faster than the private sector there.
That wedge basically means that the burden of government as a -- GDP is rising.
And sooner or later as well there's a magic tipping point where one strongly camel's back causes it to collapse but there is that tipping point but but there is a tipping point and we are seeing it now does that mean that -- five years away from being -- twenty years I don't know if I knew I'd be rich I'd be on Wall Street or something.
But I know that the trend line is very bad it happened under bush a Republican it's happening under Obama a Democrat.
It doesn't.
Work let's talk about some of the yet these good intentions that go bad clean energy.
Solyndra -- word association game.
And you look at a lender -- that's just that's just one example -- just the tip of the iceberg with the dozens of these companies go bad.
But it's really the story behind the story where it turns out that these are big campaign contributors there then getting these interest free loans and forgiven loans from the government.
You're distorting capital in the economy what does that mean it's something of boring economic term.
It basically means that resources are being used less productively which means we get less growth.
Which means workers get lower wages it adds up to a bad situation.
We've got laws that encourage homeownership.
President Bush says -- -- own a home.
He have an ownership society you take care of things it's good for the economy where you then create housing bubble that blows up.
So the very people who were supposed to be help homeowners.
Often whether ones that we're sort alerted the walking out on the plank and then of course the -- collapse we off -- the -- -- can test the waters.
We have these tax credits which are supposed to direct our spending too good things.
It sounds great.
But from us tiny little tax code in 1913.
Only two pages long fourteen pages of law.
We've now morphed into the 72000.
Page monster a -- of the IRS website.
There's more than a thousand different forms and regulations and things like that you can download nobody understands that and all it's a boon to that CPA -- HR block I'm sure loves it.
But it's definitely a big millstone around the neck of the American economy but every single one of those -- 2000 pages how.
Have something into that probably sounds good but look what it's at what it adds up to help.
And lastly on the spending.
The machinery of the welfare state everyone in the street we ask -- you gotta take care of people and we all want to help people.
Unintended consequence what worries me about the welfare state is this is where you're hurting people who are most vulnerable.
Because the welfare state when you look at the dozens of programs that comprise the welfare state it becomes like -- like flight paper and hold people down.
There are some shocking figure showing.
That as you as your income rises you're trying to make yourself better off you're doing the right thing you're trying to live the American DREAM -- you earn more income.
You start getting taxed on one -- And then the government's taking away all these benefits on the other -- so you have.
Lower income people who are trying to get better -- who actually lose living standards they have less disposable income.
That -- if they get 101000 dollars more in salary it's amazing because they pay more in taxes being in this higher bracket.
And they lose government benefits they lose government benefits whether it's food stamps whether it's earned income credit whether it's -- -- -- -- -- whether -- Medicaid eligibility.
Whether it's housing assistance you're like on -- treadmill but you're not even running hard to keep.
Where you are you're running harder and harder and the treadmills going backwards and think about the message that sends to the very people we want to help.
It it it discourages and they decide well how come there's gonna try to get on disability are obviously not gonna work -- hard in in Pennsylvania you mentioned if you had 29000.
Dollars of income.
You're better off staying there -- earning 55000.
I hope this was an exception not the rule in effect -- -- don't earn more.
-- -- you lose the safety net well maybe at the safety net wasn't luring people into disincentives.
We would have the big problem we have today.
Good intentions going bad thank you Dan Mitchell coming -- you.
