Shocker: Less Government Means More Jobs

“We can’t just cut our way to prosperity,” said President Obama last week, referring to spending cuts being pushed by Republicans. But according to a study done by the Phoenix Center, if the government cut back on red tape America would see more job growth:

According to the Phoenix study, “even a small 5% reduction in the regulatory budget (about $2.8 billion) would result in about $75 billion in expanded private-sector GDP each year, with an increase in employment by 1.2 million jobs annually. On average, eliminating the job of a single regulator grows the American economy by $6.2 million and nearly 100 private sector jobs annually.” The reverse is true as well, according to Phoenix, which said “each million dollar increase in the regulatory budget costs the economy 420 private sector jobs.”

“Our statistical analysis of historical data indicates that federal expenditures on regulatory activity have a significant impact on the size of the private-sector economy and private-sector employment,” says Dr. George S. Ford, chief economist at the Phoenix Center. “While the entire federal budget must be cut to address the deficit problem, the evidence indicates that reductions in the overall federal regulatory budget may substantially impact the growth of economic output and employment.”

To be clear, downsizing government isn’t always good for the economy. Anarchy isn’t good for the economy. In order for a free market to flourish, we must have laws protecting our rights as well as government mechanisms for enforcing them.

But beyond a certain level – and we are miles beyond that level now – government hurts the economy. It hurts our ability to prosper.

Obama says that we can’t cut our way to prosperity. Actually, given government’s current size, we can.

Rob Port

Rob Port is the editor of In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters.

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