Government Regulation Costs Money

Most thinking people will admit that government regulations end up costing money. A LOT OF MONEY. A new study from the state of California is a case in point.

via Hotair.com
http://hotair.com/archives/2009/09/25/study-regulation-costs-california-economy-almost-500-billion/

As study by Sanjay B. Varshney, Ph.D., CFA, Professor of Finance and Dean - College of Business Administration California State University, Sacramento; and Dennis H. Tootelian, Ph.D. Professor of Marketing – College of Business Administration
California State University, Sacramento

here's the Abstract (emphasis is mine):

This study measures and reports the cost of regulation to small business in the State of California. It uses original analyses and a general equilibrium framework to identify and measure the cost of regulation as measured by the loss of economic output to the State’s gross product, after controlling for variables known to influence output. It also measures second order costs resulting from regulatory activity by studying the total impact – direct, indirect, and induced. The study finds that the total cost of regulation to the State of California is $492.994 billion which is almost five times the State’s general fund budget, and almost a third of the State’s gross product. The cost of regulation results in an employment loss of 3.8 million jobs which is a tenth of the State’s population. Since small business constitute 99.2% of all employer businesses in California, and all of non-employer business, the regulatory cost is borne almost completely by small business. The total cost of regulation was $134,122.48 per small business in California in 2007, labor income not created or lost was $4,359.55 per small business, indirect business taxes not generated or lost were $57,260.15 per small business, and finally roughly one job lost per small business. This study provides the most comprehensive and complete analysis of the total regulatory burden in California.

This is a huge handicap on business, and because of this, businesses have been fleeing California for the past several years. With the most recent budget short-falls, the state legislature has INCREASED the burden on small business, with the same result, more layoffs and businesses leaving the state in droves.

Yet, with that in mind, the Democrats want more of the same for the entire country. You'd have to be daft not to understand that this would have a huge negative impact upon the country as a whole. The left decries outsourcing of jobs, but fails to understand that their short sighted plans to heavily regulate business merely means more and more companies will locate off shore...