Regulation Paper

571 Words3 Pages
The real cost of regulation on business is costs that are passed on to the consumer as higher prices. Regulations cause compliance costs to use profits from the business which causes businesses to charge higher prices and these higher prices increase the daily expenses for consumers. The costs of regulations are paid for by both the producer and the consumer so they cost the economy money and have a negative effect on economic growth. Fewer regulations would allow resources to be available for businesses which they could use to invest money in, expand their business, and create new jobs and lower prices. Overregulation causes hidden costs to the economy by bringing large compliance costs to businesses which slows economic growth and reduces the chance of jobs being created. Regulation costs are paid for by higher prices charged to consumers, fewer choices and less innovation. A decrease in innovations results in decreased productivity, a decrease in employment and a decrease in economic growth. Small businesses have higher costs related to regulations. This causes production facilities to relocate to countries where there is less regulation and affects the international competition of American products and services that are produced domestically. These have negative effects on the U.S. economy. Regulations on health care mean higher rates for businesses on their group health insurance premiums. To offset these higher prices, businesses increase the price employees pay for their part of the health care costs. An increase in regulations by the federal government to control markets is not helping the economic problem. To help solve the economic problem we should use free market principals to regulate industries instead of the government. Using regulation through free markets provides the economy with regulation that is constantly improving, increased innovations,
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