Monday, October 15, 2012

Is overregulation contributing to slow recovery in the US?

John Taylor makes an interesting point on his blog (here) with respect to the bloated government regulation in the US. Here are two charts that compare the recovery from the recession in the early 80s (during the Reagan administration) with the current economic recovery. One trend that really stands out is the number of federal workers employed in regulatory activities (excluding transportation security). The two trends are drastically different.

Source: Economics One

It shows how the US regulatory framework is becoming in many ways similar to the European governments' tactics. Regulate it all, ask questions later. Below is a comparison of the quarterly GDP during the two recoveries. Of course this could simply be a coincidence, but is it?

Source: Economics One

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