RANCHO SANTA FE, Ca., January 6, 2014 – Has Liberty died? Are we merely waiting for the political equivalent of a physician to “call the time” so that the certificate can be prepared? If so, excessive regulation may be the cause of death.
According to the Merriam-Webster Dictionary, Liberty is “the state or condition of people who are able to act and speak freely; the power to do or choose what you want to; a political right.” Conversely, regulation is defined as “an official rule or law that says how something should be done (or not done).” In effect, regulation is the antithesis of Liberty.
That being said, regulation isn’t inherently bad. In fact, regulation is fundamentally required “in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.” As you may recall, those were the arcane justifications that were used to “ordain and establish” an old document to which we used to pay deference.
In fact, regulations that preserve Liberty and protect the public are an absolute necessity. However, we have a civic responsibility to question those that don’t. Unfortunately, we seem to have abandoned that civic responsibility just as we have the one to cast an informed vote.
The most egregious challenges associated with regulations are:
- They divert capital from the private sector;
- They tend to be grossly inefficient;
- They are rarely reviewed to determine whether they are actually achieving their desired effect;
- They almost never go away; and
- They may be unduly influenced by those who fund political campaigns and are often used by the Parties to repay such debts.
Let’s explore each of these problems.
For the Federal Government to “govern,” it must create an infrastructure to promulgate regulations that become the basis for such governance. Then, it must create an infrastructure to monitor compliance with such regulations and another one to enforce compliance.
State and local governments need to follow this same practice, and each element of infrastructure needs to be funded. Since none of these governing bodies produces a product or service that contributes to the gross domestic product, each must secure funding. Taxes are predominantly used to fill the void. As a result, capital is diverted from the private sector.
Now, let’s apply that reality to an example.
- Hold a dollar bill in your hand. Allow it to represent a tax dollar at the Federal level that is supposed to provide a benefit to some segment of our society. Then, do the following:
- Fold a small section of that bill to represent the cost of the Department or Agency infrastructure that is required to promulgate the associated regulations;
- Fold it again to represent the cost of the infrastructure that is required to monitor compliance;
- Fold it again to represent the cost of the infrastructure that is required to enforce compliance.
Notice that you’ve paid a dollar in taxes but that considerably less than a dollar will be available to provide the benefit for which it was collected. That’s inefficient.
However, what if the program was to be funded by the Federal Government but executed at the State level (as many programs are)?
Begin folding the dollar again: Once for the infrastructure to promulgate the State-related regulations; once for the State infrastructure to monitor compliance; and once for the State infrastructure to enforce compliance.
How much of the dollar is available to provide the benefit that was promised?
You can continue the exercise if you’d like to see how much money is available if the program is required to be implemented at the local level. However, the experience can be traumatic.
Now, let’s consider the eternal life that’s granted to most regulations.
If regulations were given sunset provisions or at least subjected to a scheduled review to determine their efficacy, they would not be as oppressive as they have become. Unfortunately, this practice is not followed. As a result, regulations tend to expand exponentially over time and negatively impact your personal Liberty.
For example, it has been widely reported that 2014 was launched with approximately 40,000 new State and local regulations. Are you fully aware of those that may impact you?
Then, add the more than 50 titles and 200,000 pages of the U.S. Code to your responsibility to know the law. How are you feeling about that now?
In recent years, the Dodd-Frank Act has added approximately 14,000 pages of new regulations, while the Affordable Care Act has added nearly 12,000. Neither has been fully implemented, so expect those numbers to grow substantially over the next few years.
In 1913, the Federal Tax Code began with 400 pages. By the Orwellian date of 1984, it had grown to more than 26,000 pages in a reflection of Big Brother. However, those 71 years represented relatively modest growth. In the ensuing 29 years, the Federal Tax Code has expanded to roughly 74,000 pages. Consequently, the statistical probability of filing a completely accurate tax return is essentially nil.
Legislators are also prone to surrender to the critical mass of regulations that precedes them. When you have hundreds of thousands of pages of codified law just at the Federal level, it is easier to create new laws than to determine whether existing laws are sufficient or are in need of modification. As a result, the volume of regulations innately expands as does the potential for conflicting provisions.
Next, you should ask yourself: “Why do we need so much regulation?”
Political campaigns cost money … big money. The Presidential candidates of the two major Parties alone spent approximately $2 billion on their campaigns (not including each candidate’s “victory fund” or the nonprofit groups and other super PACs that also invested heavily on the candidate of their choice).
Even campaigns for local offices can require millions of dollars in today’s environment. As a result, the Parties and their candidates accrue significant political debts, which they often repay through political favors embedded in the structure of regulations.
Because regulations almost never go away, they are “the gift that keeps giving” to private sector interests that unduly influence every level of government, but which are particularly manipulative at the Federal level.
This regulatory erosion of Liberty is not Party-centric.
While Conservatives may claim to be for small Government and less regulation, the latest Bush Administration belied that assertion. It expanded Government at a rate not seen since the days of President Franklin D. Roosevelt, whose political agenda will never be associated with the word “conservative.”
While the United States was drawn into World War II during the Roosevelt years, the Bush Administration was able to craft two of its own. If that wasn’t enough, the House Committee on Oversight and Government Reform subsequently examined 700 projects that were executed between 2002 and 2008 and determined that the associated $1.1 trillion in funding was beleaguered by “significant waste, fraud, abuse or mismanagement.”
So much for “Conservative outrage.”
Correspondingly, Liberals pretend to favor regulation only as a means to protect the middle class. They used to argue in favor of big Government as a necessity to protect the poor. However, they’ve shifted their attention to the middle class since the poor cannot contribute sufficient money or votes to significantly affect elections.
In a deft reprise of the “Read my lips. No new taxes” faux pas of the first President Bush, then-Senator Obama stated during his 2008 campaign: “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” He could not have declared this more definitively unless he had ended it with the word “period.”
Since then, we have learned that middle-class individuals apparently do not smoke or use tanning beds, various forms of transportation, or electricity. Each of these has either directly or indirectly incurred a Federal tax increase since 2008.
We have also discovered that the penalties prescribed by the Affordable Care Act are only taxes for purposes of the Supreme Court. Otherwise, they would violate the President’s promise.
Meanwhile, the Federal Reserve has been radically expanding the supply of U.S. currency while masking it with fictitiously low interest rates. While its “quantitative easings” have propped up the banking industry’s balance sheets (and, correspondingly, the stock market), they have also set the trap for a period of rampant inflation.
The combination of potential inflation with Government charges that have been semantically disguised as fines, fees, and penalties gives rise to a term I coined in an article I wrote in October of 2009: “The Ignorance Tax.” Essentially, one would have to be ignorant not to recognize that every American’s discretionary income is being deleteriously impacted by these Government or quasi-government actions that are veiled as something other than a tax.
The reality is that regulations are akin to chemotherapy: Those that “provide for the common Defence and general Welfare of the United States” without killing our “unalienable Rights” are a necessary and appropriate protocol. Unfortunately, our elected officials seem to struggle with the concept of dosage. They default to “more is better.”
As a result, our regulatory environment and its associated costs tend to compound over time and serve as a political Petri dish in which to grow new strains of waste, inefficiency, and corruption.
Unlike Alzheimer’s disease, frivolous regulation has no age preference. Unlike sickle cell anemia, it doesn’t discriminate on the basis of race. Unlike uterine or prostate cancer, it doesn’t distinguish between the sexes. It simply attacks the Republic and our rights as citizens in an insidious manner.
The only questions that remain are: Are you willing to allow Liberty to die; and if not, what will you do to demand a cure?
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T.J. O’Hara is an internationally recognized author, speaker, and strategic consultant in the private and public sectors. In 2012, he emerged as the leading independent candidate for the Office of President of the United States and the first nominee of the Whig Party in over 150 years.
This article first appeared in T.J. O’Hara’s recurring column, A Civil Assessment, in the Communities section of The Washington Times.