The New York Federal Reserve estimates the U.S. economy will grow at an annual rate of nearly 4 percent in the fourth quarter. That would be after breaking 3 percent growth in the second and third quarters this year. The Trump economy is booming. And the New York Fed predicts the boom will continue, with growth above 3 percent in the first quarter of 2018. The last time we had four consecutive quarters of growth above 3 percent was 13 years ago, in 2004-2005.
Can that kind of growth be sustained? Many economists are skeptical and point to President Trump’s trade and immigration policies, which they say undermine his efforts. The passage of pro-growth tax reform this week, on the other hand, could help Trump keep his pledge.
But one thing Trump has done that has received little attention despite arguably driving today’s economic boom is his decision to declare war on the regulatory state.
Government regulations are like millions of Lilliputian threats that tie down our economy and prevent businesses from expanding and creating jobs. As my American Enterprise Institute colleague Jim Pethokoukis points out, one recent study found that “the past 50 years of federal regulations have reduced real GDP by roughly two percentage points a year, or nearly $40 trillion. Instead of the US economy growing by just over 3% a year since World War Two, it would have grown by over 5% a year.” Put another way: Without all that regulation, our economy would be about four times larger than it is today.
We obviously can’t eliminate all regulations — we all want clean air and clean water. But the unbridled growth of the regulatory state has imposed extraordinary burdens on job creators and robbed American workers of wages and opportunity.
Trump inherited a regulatory state that had grown to unprecedented levels under President Barack Obama. One way to measure the growth in regulations is by counting the number of pages in the Federal Register, the book the government publishes containing all new regulations. Seven of the eight largest annual page totals in American history occurred under Obama. Before Obama, no president had ever exceeded 80,000 pages in the Federal Register. In 2016, Obama became the first president to break the 90,000-page mark — 96,702, to be exact — and if you add his last 20 days in office, the total reaches 103,432.
Trump cut that number nearly in half. From Jan. 23 through Dec. 19 of this year, he has added just 53,550 pages to the Federal Register. And many of those pages were not new regulations but announcements of regulations being withdrawn. His efforts exceeded even those of President Ronald Reagan, who cut Federal Register pages by more than one-third during his time in office.
Obama also set a land speed record for “economically significant” regulations — regulations costing the economy $100 million or more. According to the White House Council of Economic Advisers, Obama imposed 494 major regulations during his time in office — a 38 percent increase over his predecessor. And in his final eight months in office alone, according to Neomi Rao, administrator of the Office of Information and Regulatory Affairs, Obama “saddled the economy with as much as $15.2 billion in regulatory costs.”
When Trump came into office, he immediately began reversing this trend. He worked with Congress to repeal 14 major regulations implemented under Obama, and withdrew or delayed more than 1,500 others by executive action. Most importantly, he issued Executive Order 13771, which directed government agencies to eliminate two existing regulations for each new one issued, and to ensure that the net costs of any new regulations are zero.
Last Thursday, Trump announced the first results of this effort: His administration achieved $8.1 billion in lifetime regulatory savings — and is on track to achieve an additional $9.8 billion in savings in fiscal 2018. Since excessive regulations are a hidden tax on American workers and businesses, that amounts to an $18 billion tax cut.
Mr. Theissen’s article is true, de-regulating is NOT enough on its own to create a higher growth economy.
He fails to touch on the effect of Obama-holdovers inside various federal agencies.
Although Pres Trump might have done away with their policies, many of this shadow gov’t’s members pretend they still have a right to regulate you and me, our businesses, etc.
The de-regulating is allowing the Trump Admin to clean out such double agents.
The VA is one area where this house cleaning is going very well.
The EPA is going to be another one.
An unexpected (by us) consequence of Trump’s de-regulation move is a more effective swamp draining than could have legally been done otherwise.
The guy’s a genius!
Liberals have no idea how the economy works or grows. Yet, they love to buy votes with fist-fulls of other people’s money. Amazingly, they have no idea where the money comes from or what happens when it runs out. They believe that you simply print more and keep printing until the ink, paper and trees run out.
The left knows one move; tax and confiscate. Take a look at their Nobel-winning “economist” Krugman. I don’t think there is a greater economic idiot than he, yet he is their crown jewel. Recall the lunatic promises of Hillary and Bernie. These people NEVER need to be in charge of the economy, let we share the fate of Venezuela.
Tell us something we didn’t know already.
Trish Regan And Ben Stein Take a Wrecking Ball to the GOP Tax Bill: ‘Disgraceful’
All income tax is theft so allowing ANYONE to keep more of the money they earned and being mad about those people not being robbed is just as stupid as the phrase Corporate Welfare like the Corporation is getting food stamps.
How bout being ticked any body pays income tax, or property taxes. Graduated tax system comes directly from the communist manifesto.
Either go to a sales tax or charge everyone the same percentage.
No one seems to bitch that everyone pays he same tax percentages on utilities.
Liberal Demac-RATS want to tax everything from handguns to hamburgers to pay for their little pet projects just this summer they rejected a tax on soda pop as was proposed by narrow minded liberal pinheads
I actually heard one ANALyst complaining that those who pay little or no taxes will get a smaller benefit than those that pay a lot of taxes.
As I read what Trump is doing to help our economy, our citizens and our country, I hardly ever see Greg post any longer. Perhaps he got a blinding glimpse of the obvious.
@enchanted: Yeah, that’s a good one. Did any liberals get “a blinding glimpse of the obvious” when Obama was President? Those propaganda-colored glasses block all that out.