Stop Feeding the 800-Pound Regulatory Gorilla

When you find yourself in a hole, stop digging. It seems like simple enough advice.

Unfortunately, this kernel of common sense continues to be lost-or worse-totally disregarded, by a growing cabal of financially illiterate U.S. policymakers. From the looks of things, they seem as determined as ever to hinder, if not destroy, our nation's economy and small businesses through crippling regulatory overkill, a broken tax system that punishes our nation's most successful workers, and a growing, nightmarish $15 trillion national debt that is scaring people away from investing in America's future.

We are in trouble. And we are still digging the hole.

Despite some dubious recent economic improvements, including a questionable downtick in unemployment to 8.3 percent (partially the result of a declining labor force participation rate) the reality is we still occupy a disastrous economic climate-one of the worst in United States history.

So what exactly lies behind our dismal economic state of affairs? Why does our dynamic U.S economy remain static and stuck-floundering in first gear? The answer is simple: Washington is in the way. It is our nation's leaders who deserve the lion's share of responsibility for creating and fomenting this woeful economic atmosphere.

One of the chief anti-growth culprits is the 800-pound regulatory gorilla our elected (and increasingly unelected) policymakers have strapped on the back of our country's small business owners. On average, small businesses are forced to spend 70 percent more time complying with federal regulations than their large company counterparts, not to mention 45 percent more time on tax compliance. It is this growing burden of regulatory compliance that is preventing our nation's small business owners from growing, prospering and hiring new workers. It is taking up far too much of their precious time and, at worst, it is putting them out of business.

In case you missed it, Gallup released a revealing poll recently showing just how bad the regulatory nightmare has become for America's small businesses. According to the poll, the number one concern among small-business owners in the United States today is-you guessed it-complying with government regulations. Almost a quarter of respondents said this is the most important problem facing them today.

To make matters worse, the regulatory gorilla is on a feeding frenzy with policymakers only too happy to feed its insatiable appetite. And the cost is substantial. According to a study for the Small Business Administration, regulations add a staggering $10,585 in costs per employee. In an age of fierce global competition, this is a cost America can ill afford.

While President Obama has acknowledged the need to minimize regulations, the number is still mushrooming out of control. Obama administration regulations on new business rose to 3,573 final rules in 2010, up from 3,503 in 2009-the equivalent of about 10 per week. Meanwhile, the 2010 volume of the Federal Register stands at an all-time record-high 81,405 pages composed of final rules, proposed rules, meeting notices and regulatory studies!

Home Depot's outspoken founder Bernie Marcus hit the nail on the head when he told Investor's Business Daily recently that President Obama doesn't have the faintest clue of how jobs are created. According to Marcus, "[Obama's] speeches are wonderful. His output is absolutely, incredibly bad. As he speaks about cutting out regulations, they are now producing thousands of pages of new ones. With just Obamacare by itself, you have a 2,000-page bill that's probably going to end up being 150,000 pages of regulations."

How is this a recipe for job growth?

We are talking about America's most prolific job creators here. These are the people that provide the precious jet fuel behind job creation. They are hardworking men and women sweating day and night to grow their businesses and feed their families. Their sweat in turn drives our economy forward. So why are we drowning them in all of this anti-growth, job-killing onerous regulation? Especially during a time of high unemployment and lackluster job growth?

The recent cover story ("Over-Regulated America") in The Economist sums it up rather well: The home of laissez-faire [America] is being suffocated by excessive and badly written regulation. And, if we are not careful, this regulation may crush the life out of America's economy.

The time has come. Stop feeding the gorilla.