Deregulating the economy isn't fiscally conservative if the regulation is saving money
Nathan Bryant, Contributor at Business Insider
http://www.businessinsider.com/deregulating-the-economy-isnt-always-fiscally-conservative-2017-6
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Clocking in at 2,300 pages, Dodd-Frank is a gargantuan law — aside from its hundreds of new rules, it created a dizzying web of authorities, boards, bureaus, councils, and offices to oversee the financial system. And on top of the 2,300 pages of the law itself, Dodd-Frank has given rise to an additional 22,000 pages of agency-issued regulations. Overall, Dodd-Frank has cost the economy an estimated $36 billion since its implementation.
But Republicans must not be overzealous, either. Aggressive deregulation may produce a short-term economic boom, but politicians must also give thought to the long-term consequences.
In fact, a long-term approach is an essential part of true fiscal conservatism. Literally, the word “conserve” means to save resources. And to effectively save resources, one must obviously consider policies from a holistic perspective. A certain economic policy may have impressive short-term benefits, but if eventually results in some massive expense, it does not ultimately save resources — all of the policy's previous, short-term benefits are more than canceled out. Thus, the policy would not be fiscally conservative.
When this holistic principle is applied, regulations are seen in a rather different light. Dodd-Frank has cost the economy $36 billion, but this pales in comparison to the staggering costs of the Great Recession. According to the Dallas Fed's more conservative estimates, the Great Recession cost the economy $6 trillion to $14 trillion. The highest cost estimate in that report was $30 trillion. So if financial regulations do actually prevent another major financial crisis, they will save the economy trillions in the long run. It would literally take hundreds — or even thousands — of years before the costs of effective financial regulations exceeded their benefits.
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