Based on estimates from Federal agencies themselves as reported by the American Action Forum, the Biden Administration imposed a record $1.8 trillion in present value in new regulatory costs on the economy. If the potential cost savings from rolling back these rules is annualized over a 20-year period, it is equivalent to a 0.29 percentage point increase in annual economic growth, assuming that every dollar of regulatory cost reduces gross domestic product (GDP) by a dollar and that these regulations have no market benefits.5 However, even those effects come in far below University of Chicago Professor Casey Mulligan’s estimate of $5 trillion in present value regulatory costs in Biden Administration rulemaking, when properly accounting for resource and opportunity costs that, in his assessment, were not captured in the official estimates.6 If Professor Mulligan’s estimate is used, the potential long-run cost savings from rolling back these rules increase to 0.78 percentage points annually. As of October 2008, I had not anticipated that the public policy response would be to pay the unemployed so generously, to the point that millions could make more unemployed than employed.
Author: Menzie Chinn
Published at: 2025-06-28 19:47:08
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