Economic Growth Rose to 3 Percent in Second Quarter of 2017

The U.S. economy grew at an annual rate of 3 percent in the second quarter. That was significantly higher than the 2.7 percent expected. The New York Times noted that this is the economy’s best quarterly showing in two years. Growth was a mere 1.6 percent per year under Obama.

Deregulation could help increase the growth rate. One example is getting rid of unnecessary occupational licensing regulations. Occupational licensing has expanded from covering 5 percent of the workforce in the 1950s to 30 percent today. The harm from occupational licensing regulations is so obvious that even the Obama administration, which was usually pro-regulation, recognized it, observing that “licensing restrictions cost millions of jobs nationwide and raise consumer expenses by over one hundred billion dollars.” Studies also show that excessive occupational licensing increases the crime rate and thus drives up state prison spending.

Many other federal regulations should also be withdrawn, since they not only cost money, but also harm health or safety. Thus, President Trump’s January 30 executive order requiring “agencies to revoke two regulations for every new rule they want to issue” could potentially be quite beneficial (if it is allowed to go into effect—a challenge to the rule was filed by an environmental pressure group and is pending before a judge appointed by former President Obama. See Public Citizen, Inc. v. Trump, D.D.C. case number 1:17-cv-00253).

For example, revoking ill-conceived regulations could save hundreds of thousands of lives by expanding access to organ transplants and new drugs and therapies. Currently, there are federal regulations that impede smoking cessation devices needed to reduce the death toll from cigarettes. Other regulations make it harder to fight infectious diseases and control disease-carrying pests. Still other rules cost thousands of lives in developing countries by driving up food prices and shrinking the food supply, which results in an increased death toll due to malnutrition and hunger-related diseases. Other federal restrictions have helped destabilize and impoverish war-torn regions where hunger is already widespread, such as regulations issued pursuant to the 2010 Dodd-Frank Act.

Other nations have gone much further than Trump’s “two-for-one” order, and benefited as a result. As The Hill newspaper notes, “the U.S. isn’t the first country to impose such a restriction on regulators.” For example, for every new rule issued in the United Kingdom, “three existing rules must be eliminated. According to a U.K. government report, that requirement saved businesses £885 million from May 5, 2015 to May 26, 2016, or nearly $1.1 billion based on current conversion rates.”