The Mercatus study says that the growth lost to just the regulations put in place since 1980 has been huge:
KEY FINDINGS
Economic growth in the United States has, on average, been slowed by 0.8 percent per year since 1980 owing to the cumulative effects of regulation:
If regulation had been held constant at levels observed in 1980, the US economy would have been about 25 percent larger than it actually was as of 2012.
This means that in 2012, the economy was $4 trillion smaller than it would have been in the absence of regulatory growth since 1980.
This amounts to a loss of approximately $13,000 per capita, a significant amount of money for most American workers.
Even if one were to concede (which I don't) that half of regulatory bloat added since 1980 was worthwhile from a public-policy, non-economic perspective, if the ones that haven't been worthwhile hadn't been imposed, the economy would be $2 trillion bigger, or about $6,500 per capita, i.e., about $26,000 per year, and growing for a family of four. If that additional output were taxed at 25 percent, the current $500 billion per year in federal budget deficits probably wouldn't exist (of course the government wouldn't be anywhere near as large as it currently is, either).
What I wasn't able to glean from the full study was an estimation of the GDP impact per year. If it averaged 0.8 points over all of the thirty-plus involved, as the authors contend, then the per-year impact in recent years certainly has to be greater. The growth in the annual GDP holdback due to regulations explains why the press, which would rather die than blame government regulations for anything negative, has had to adjust growth expectations down to annual "new normal" levels as low as 2 percent or even 1.5 percent – performances which would have been considered outrageously unacceptable and even politically perilous decades ago.
It's the cumulative effect of ever more volumnious regulations which is the most damaging. IBD alluded to this phenomenon, but the study's authors succinctly explained it:
But regulations have a greater effect on the economy than analysis of a single rule in isolation can convey. The buildup of regulations over time leads to duplicative, obsolete, conflicting, and even contradictory rules, and the multiplicity of regulatory constraints complicates and distorts the decision-making processes of firms operating in the economy. Firms respond to both individual regulations and regulatory accumulation by altering their plans for research and development, for expansion, and for updating equipment and processes. Because of the important role innovation and productivity growth play in an economy, these distortions have consequences for the growth of the economy in the long run.
More at:
http://newsbusters.org/blogs/nb/tom-blumer/2016/04/28/not-news-study-shows-4-trillion-annual-gdp-growth-lost-post-1980-regs
