Stossel on the Fed regulatory budget.

Here’s John Stossel:

In The Washington Times Richard W. Rahn points out that the U.S. government’s “regulatory budget” is growing faster than the overall federal budget. According to a 2011 regulatory budget report ,

“the growth in dollar terms over the last ten years is more than double that of any previous decade.”

Rahn worries that the U.S. will become

“one vast regulatory state and, eventually, the economy will become strangled by its own regulations…”

Maybe it’s already happened.  The budget of the Securities and Exchange Commission (SEC):

“grew tenfold (to more than $1 billion) in the past 25 years, but there is no evidence it has made us any safer from financial fraud. In fact, the opposite seems to be the case. The Madoff Ponzi scheme was the biggest financial fraud ever. Yet when knowledgeable people presented evidence of the Madoff scheme to the SEC, they were just blown off. Now the SEC wants a bigger budget as a reward for its failure, and the agency and members of Congress are demanding more power for the SEC. The United States has many laws against financial fraud, so that is not the problem. The problem may be – in addition to SEC incompetence – that the public assumes the SEC is looking out for it and consequently fails to do proper due diligence. In other words, the existence of the SEC may be increasing rather than diminishing risk.”

Private enterprise has an incentive to keep lawyers from strangling the enterprise.