Motus Mentis

Things look gloomy for the US economy these days. Job numbers are way down. The markets are sagging.

A while back President Obama instructed American businesses to “step up” and resume hiring. That ought to have disposed of the problem at once, but for some reason compliance has been spotty. A report from the Small Business Administration, The Impact of Regulatory Costs on Small Firms, may help to explain this mutinous insubordination.

We read:

The annual cost of federal regulations in the United States increased to more than $1.75 trillion in 2008. Had every U.S. household paid an equal share of the federal regulatory burden, each would have owed $15,586 in 2008. By comparison, the federal regulatory burden exceeds by 50 percent private spending on health care, which equaled $10,500 per household in 2008. While all citizens and businesses pay some portion of these costs, the distribution of the burden of regulations is quite uneven. The portion of regulatory costs that falls initially on businesses was $8,086 per employee in 2008. Small businesses, defined as firms employing fewer than 20 employees, bear the largest burden of federal regulations. As of 2008, small businesses face an annual regulatory cost of $10,585 per employee, which is 36 percent higher than the regulatory cost facing large firms (defined as firms with 500 or more employees).

When you add to this the unpredictable accretion of new costs and regulatory burdens forthcoming under Obamacare and other pending government initiatives, the reluctance of businesses to make new commitments — especially the small businesses that make up such a large proportion of the US job market, and upon whom the weight of government regulation falls most heavily — is easy to understand.

I had prepared another thousand words on this important topic, but instead, here’s this: