Deregulation Is the Only Hope For Big Government

Although deregulation is not often supported by those who support big government, it is actually the most realistic path forward for those who support an expensive state. Decades of deficits and poor management have led to a massive national debt and ever-growing interest payments. The interest payment is now similar to traditionally large expenses like defense and healthcare. In order to move from deficit to surplus, chip away at the interest payment, and continue to grow, deregulation has never been more important.  Deregulation is the most effective way to increase tax revenues. When your country’s industries are stagnant and heavily regulated, there is less tax revenue than in a country with a less significant regulatory burden. Regulation will also lead to the breakthroughs in business and technology that can allow the government to do more with less as cutting budgets becomes necessary. Finally, a free market allows the people to adjust to the shocks of a late stage government far more fluidly than a more heavily regulated option. 

Tax revenue is the second most important part of government financial management. Spending is the most important part as there are fewer variable external factors that can influence it. The government has control of spending in a way that it does not have over revenue. However, revenue is derived from two factors: the economic conditions and the government’s means of extracting resources. A heavier burden of regulation makes it difficult for businesses to create new things and disincentivizes them from trying. While regulations are often meant to help, they primarily blunt business progress. In a free nation with clearly delineated property rights and a safe environment, business can flourish and people can live freely. Although some level of regulation is needed, America and all developed countries are far more regulated than would be optimal. If the US government was to reduce regulations and create a simple and transparent system, the people would be able to create far more wealth and make more taxable income. A tax plan will never be enough to help a government escape from a dragging economy. However, with a strong and free economy, raising taxes has more power to diminish a deficit.

Although it is unlikely that the US government would put significant effort into cutting its budget, the growth of the debt and growing international tensions could force it to start considering cutting. If the government desires to continue offering so many services, the most simple way to do so is to offer the same service with less resources. Although it would be amazing for the government to develop a more efficient management style, the easiest way for it to offer the same amount of services with less taxpayer money would be for it to take advantage of new technology. However, the same sort of government that continually increases in spending is often also the same sort of government that increases regulation, thus making the technology that could help it less likely to develop. Rather than spending money on government research and development programs, reducing regulation reduces enforcement costs while catalyzing growth. There often are not trades in life that cost so little to gain so much, but the incentives inherent to government make deregulation rarely exercised. As just one customer out of many, the government must think clearly about how it is limiting its own consumption through unnecessary regulation.

If the government insists on continually increasing in size, the least it can do is give its people an insurance policy. The market provides the most well evidenced adjustment mechanism for the basic goods of life. As a government is forced to cut basic services to service debt or fight off enemies at the gate, the market can allow the people to come up with solutions that let them weather the difficult time. A heavily regulated market does less damage when everything is working then when everything breaks down. No one knows how the world will develop, and regulations can provide a dangerous waste of resources and human potential that becomes only more serious as the world becomes more dangerous. The market may not always provide a good outcome for everyone, but it will provide a good outcome for everyone far better than a paternalistic state in a time of crisis. The state which intended to take care of the people shifts instantly to taking advantage of them when its own survival is threatened. From Nazi Germany to communist Russia, the state which gained its legitimacy from the people never hesitated to kill the people when their interests conflicted with those of the state.