Full Title: Costly Mistakes: How Bad Policies Raise the Cost of Living
Author(s): Salim Furth
Publisher(s): The Heritage Foundation
Publication Date: November 1, 2015
Full Text: Download Resource
Government policy mistakes raise the prices of the things that Americans buy. An average American household can expect to pay an extra $4,440 each year thanks to just 12 such policy mistakes that have large costs and few benefits.
Local, state, and federal governments are all guilty of enforcing costly laws and regulations. At the federal level, the biggest costs come from vehicle fuel-efficiency standards, which cost consumers $55 billion a year, and the requirement to use corn-based ethanol in gasoline, which costs $31 billion per year. Occupational licensure at the state level costs consumers $127 billion per year. Local land-use restrictions drive up the cost of housing by $209 billion per year.
Altogether, the 12 policy mistakes quantified in this paper cost Americans $546 billion per year or 4.6 percent of total consumption. That is comparable to the Department of Defense budget and 18 times the budget of the National Institutes of Health. It is more than half as much as Americans spend on groceries, and more than the rent paid by every renter in America. It is three times the budget of the State of California. It is more than what 14 million average Americans spend in a year. And we pay it again and again, year after year.