There is a popular perception that Big Government represents a waste of resources, which are shifted away from the productive private sector to the somnolent public sector. Money that could be used for job-creating entrepreneurial activities is funneled into the construction of a cubicle maze filled with snoring six-figure bureaucrats.
We should be so lucky! The truth is that not many of those bureaucrats are face-down on their desk blotters. Regulators regulate. We’d be in far less trouble right now if Big Government was merely useless.
Government agencies follow one great Commandment that over-rides all other considerations: Thou must appear under-funded at all costs.
Chugging across the year-end finish line with unspent funds is an invitation to a budget cut. It is essential to churn out a steady stream of regulations, so they appear useful, if not indispensible. A regulatory over-reach that requires endless revisions is a gold mine, not an embarrassing failure. Nothing is better than issuing a thousand pages of regulation that require ten thousand pages of clarification.
No administrator wants to submit a report that says, “Everything’s going great, the problems we were created to solve are pretty much under control, and we don’t need any more funding right now.” One reason for our towering national debt is that few such reports are ever submitted, anywhere in the crumbling labyrinth of the federal bureaucracy.
You certainly don’t see many such reports from the Environmental Protection Agency, which has no trouble finding new and highly destructive things for its bureaucrats to do. Recently, they decided to review the regulatory standards for ground-level ozone a couple of years early. The existing standard of .075 parts per million was supposed to be good until 2013, but for reasons that remain officially unclear, the EPA decided to reduce it to somewhere between .060 and .070 parts per million right away.
What would the effect of this change be? After noting that roughly 85% of the country would fail to be in compliance with the new standards, Thomas Pyle of the Institute of Energy Research spitballs the damage for U.S. News:
Regions in non-attainment would be subject to greater EPA regulation and would need to alter their activities in an attempt to reduce emissions. Businesses might have to install new technologies to reduce emissions, cars might undergo more frequent inspections, and electricity prices could be significantly higher as utilities switched to different fuels. Naturally, taxpayers from all over the country would foot the bill for the actual enforcement costs of the stringent regulation.
The estimated economic damages from such compliance vary, but they may be quite severe. For example, the Manufacturers Alliance/MAPI released a 2010 study by economist Donald Norman on the effects of the 0.060 ppm standard. Norman projected that during the years 2020 to 2030, the annual compliance costs would exceed $1 trillion (in 2010 dollars). That cost works out to 5.4 percent of GDP in 2020. Total job losses by 2020 could reach 7.3 million by 2020, which represents an estimated 4.3 percent of the total labor force that year.
A trillion dollars in compliance costs, and over 7 million jobs lost? A small price to pay for EPA administrator Lisa Jackson’s noble agenda!
But wait, it gets better. The Wall Street Journal says we could also lose eight percent of America’s electrical capacity as a result of the EPA’s hyper-regulatory madness:
Both criteria are easily met. Most important, the EPA’s regulatory cascade is a clear and present danger to the reliability and stability of the U.S. power system and grid. The spree affects plants that provide 40% of U.S. baseload capacity in the U.S., and almost half of U.S. net generation. The Federal Energy Regulatory Commission, or FERC, which is charged with ensuring the integrity of the power supply, reported this month in a letter to the Senate that 81 gigawatts of generating capacity is “very likely” or “likely” to be subtracted by 2018 amid coal plant retirements and downgrades.
That’s about 8% of all U.S. generating capacity. Merely losing 56 gigawatts—a midrange scenario in line with FERC and industry estimates—is the equivalent of wiping out all power generation for Florida and Mississippi.
In practice, this will mean blackouts and rolling brownouts, as well as spiking rates for consumers. If a foreign power or terrorists wiped out 8% of U.S. capacity, such as through a cyber attack, it would rightly be considered an act of war. The EPA is in effect undermining the national security concept of “critical infrastructure”—assets essential to the functioning of society and the economy that Mr. Obama has an obligation to protect.
Gosh, I wonder what losing 8% of our electricity would do to an economy already beaten half to death by Obamanomics? The Journal suggests that instead of hauling the latest weary acolyte of discredited Keynesian theories from the dusty tombs of Princeton to head his economic team, the President should be talking about a moratorium on new EPA regulations.
That really would be a “pivot to job creation,” but of course it’s unthinkable for a statist ideologue like Obama. The suggestion assumes he’s actually serious about making job creation his highest priority, an assumption that is not supported by a single thing he’s done since reaching the Oval Office. Also, he would never dream of shutting down the EPA’s regulatory factory, and beginning a process that led inexorably to hard questions being asked about the agency’s very existence. Few Big Government organs could survive the challenge to their legitimacy that would follow a year or two of America getting along perfectly well without them.
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