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Last Friday, the Council of Economic Advisors (CEA) released a comprehensive report outlining the effects of the Trump Administration’s deregulatory agenda and the results are even better than expected.
Since January 2017, President Donald Trump has been on a deregulatory crusade. According to the report, between 2001 and 2016, fifty-three “economically significant” regulations were implemented per year. Under the Trump administration, that average has been reduced to four; a decrease of over 92 percent. Such a significant pivot demonstrates clearly that the Administration is dedicated to their stated goal of eliminating “regulations that disproportionately burden small businesses, reduce worker productivity and real wages, and distort competition in the labor market.”
Quantifying the benefits of such action can be tricky. Fortunately, the CEA summarized the historic deregulatory agenda by analyzing a sample of the most “likely largest actions in terms of economic impact.” These included important legislative victories such as the 2017 Tax Cuts and Jobs Act, regulatory actions from the FY 2019 Regulatory Budget, and a Federal Communications Commission rule that received “millions of comments,” just to name a few.
From this representative sample, the CEA determined that the President Trump’s deregulatory agenda has been a boon for main street and workers. The report’s topline states that deregulatory changes are estimated to increase annual real income by approximately $3,100 per household or about 1.3 percent. This corresponds to an aggregate increase of about $380 billion over the next five to ten years. Taken alone, the 20 most notable deregulatory actions are estimated to save businesses and consumers around $220 billion per year. This agenda is also set to increase our gross domestic product by between 1 and 2.2 percent over the next decade due to increased productivity and increased competition.
Although critics of the agenda cry havoc over deregulation, these impressive statistics underline the fact that free-enterprise and small government are the best way to achieve sustainable economic growth. Furthermore, the apparent increases in individual real income are indicators that such policies improve the lives of all Americans, not just Wall Street.
It is important to remember that the beneficial effects of Trump’s deregulatory agenda are not an anomaly. Deregulation is nearly always beneficial for Americans and previous deregulatory programs prove this empirically. Take, for example, the comprehensive deregulation of the transportation industry implemented by an unlikely champion for free-markets; President Jimmy Carter. In what was described by Clifford Winston as “one of the most important experiments in economic policy of our time,” the Carter administration removed barriers of entry and freed up market forces to promote competition in the airline and trucking industries. According to the CEA, these two actions together provided “net aggregate benefits of about 0.5 percent of national income.”
Clearly, President Trump’s deregulatory agenda is working and history shows that it will continue to work for the American people. With the size and scope of government bureaucracy rising each day along with the debt, Americans should take a stand against such encroachment on their individual liberties and support continued deregulation.