Question

In: Economics

Is there too little regulation and protection for business in the United States or is there...

Is there too little regulation and protection for business in the United States or is there too much regulation slowing down the efficiency and reducing the profitability of business in this country. Be sure to support your reflections with several examples from the text, or any other source.

Solutions

Expert Solution

Too much governmental regulations of business are a greater danger due to costs. Regulations require spending more money in business for the start-up and cost throughout the life of the business which consequently decreases profits being obtained. It also hurts the economy because when businesses are not able to produce profits they will close which harms the employment rate and thus affects the economy. Similarly too little regulations of business have the potential to harm the greater good. When the government regulations are too low it could possibly lead to another credit crisis, which is definitely harmful for home owners, banks, investors, and the economy. Thus it is important to have an even balance in order to avoid a crisis

Changes proposed by new US administration include easing up on restrictions big banks which earlier faced hassles in their trading operations, reducing the powers of the Consumer Financial Protection Bureau (CFPB), and lightening the annual stress tests they need to undergo, and which previously was aggressively pursuing bad attitude by financial institutions. The new US administration is trying to make regulation effective, efficient, and appropriately tailored which can lead to restore public accountability with federal financial regulatory agencies. This will boost the confidence of people which will help in the growth of the U.S. economy


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