Feb. 8, 2011 by Sidney Shapiro

SBA's Report on 'Costs of Regulation' Debunked

Having voted to repeal health care legislation, House Republicans have now taken aim at government regulations, describing efforts to protect people and the environment as “job-killing.”  This claim conveniently papers over the fact that it was the lack of regulation of Wall Street that tanked the economy and caused the current downturn.  But nonetheless, seeking rhetorical points to boost their anti-regulations campaign, House Republicans are trumpeting a recent report, done for the Small Business Administration’s Office of Advocacy. The report, authored by Nicole Crain and Mark Crain, claims that regulation cost the U.S. economy $1.75 trillion dollars in 2008. Upon examination, it turns out that the estimate is the result of secret calculations, an unreliable methodology and a presentation calculated to mislead. 

Crain and Crain’s $1.75 trillion estimate is far larger than the estimate generated by the Office of Management and Budget (OMB)—the official estimate of the aggregate costs and benefits of federal regulations prepared annually for Congress. The 2009 OMB report, based on data from federal agencies under the Bush and Clinton Administrations, found that in the ten years ending in 2008 annual regulatory costs ranged from $62 billion to $73 billion (converted …

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