Government Regulation of the Economy Is the 'Silent Killer'

We’ve all heard public service announcements about one disease or another, calling it the “silent killer” and warning of horrible consequences for its unsuspecting victims. A similar silent killer is on the loose now, but there are no such ads. You also won’t hear about it on the news. Nevertheless, millions of Americans are unknowing victims of this silent killer right now.


You are probably one of them.

Sam and Karen purchased an older house in their small Midwestern town last year, when they were both still working. But the silent killer soon cost Sam his job, on top of already taking its toll on Karen’s income. The couple can still afford their house payments for now, but they have a toilet, a dishwasher, and a water heater to replace. Incredibly, if Sam and Karen want new appliances, the silent killer will make those appliances more expensive (and often less effective) than what they’d buy if they were unafflicted. At least the refrigerator seems to be holding up.

Before Sam’s old boss (and a high school classmate) tearfully let him go, Sam had worked for a firm with fewer than twenty employees. But the silent killer made Sam’s skills and hard work too expensive, so he was let go. Sam had been upset and confused that day. But after Sam kept hearing about others with the same affliction being let go — and not finding other work — he finally believed his friend had no other choice. All the bosses in town were cutting old friends and doing other strange things that often defied common sense. It was as if the mob had started pulling strings everywhere. Sam eventually called his friend one day. “No hard feelings, Ralph,” was how he ended that call.


Small businesses like Ralph’s, according to some estimates, have accounted for most new jobs for people like Sam in recent years. Yet many operate on razor-thin profit margins. In dollar terms, the silent killer had made Sam $10,600 more expensive each year to Ralph. Karen, similarly afflicted, is a little over $8,000 more expensive to her employer per year. Luckily, the teeming factory can absorb such costs — at least for now.

But that’s not the half of the couple’s problems. Even if they were both working, the silent killer would take its toll in the form of additional expenses $5,000 more — each year — larger than their entire medical budget. Had they known this, they would have begged the president to forget about ObamaCare and get this relentless and remorseless killer out of their lives.

The silent killer in this story is federal regulation of the economy. Its estimated annual cost of $1.75 trillion is about two-thirds that of the tax burden. Sam and Karen, although fictional, are based in part on averages obtained from a recent report (PDF) prepared for the Small Business Administration on the impact of federal regulations on the United States economy. Notably omitted from the report are the additional costs of state and local regulations, as well as snowballing effects, such as lost opportunities and a slower pace of innovation.


Focused on the big picture of the carnage, the report also doesn’t discuss in concrete detail the regulations themselves or how they affect ordinary citizens. But that information is out there for anyone who hasn’t experienced it first-hand.

New appliance regulations issued by the Obama administration eloquently demonstrate how thoroughly saturated with regulations our lives have become. (The Department of Energy estimates price increases for water heaters of  $67 to $974, depending on size and type.) And Home Depot founder Bernie Marcus fleshes out the the havoc regulations wreak in the daily lives of ordinary Americans. That former entrepreneur has come out of retirement to warn us about how dire things really are. For example, many small businessmen are indeed having to choose between putting lifelong friends out on the streets — or closing up shop.

Public service announcements about silent killers usually end by stressing the need to identify a problem in order to solve it. I hope that by now, you have a new appreciation for the widespread menace posed by government regulation of the economy. But as important as public awareness is, it is only the first step in stopping this silent killer. It is up to us, the voting public, to consistently demand that politicians take steps to dismantle the state regulatory apparatus, and hold them to their word at each election cycle. We must alert other voters to this threat, and we must work to make American political culture highly suspicious of government meddling in the economy. This last is as important as regulation is now pervasive. But should we attain such a goal, Washington will eventually lose the urge to set rules for every nook and cranny of our lives



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