Question

The United States is one of the most heavily regulated economies in the world. Do we have too many laws or not enough? How does the existence of so many laws and regulations hinder and/or help American Businesses?

Answer 1

The United States is one of the most heavily regulated economies in the world, though United States being a Mixed Type Capitalist Economy with minimal Government intervention into the business practices. Still the control mechanism can't be omitted as the Federal Policies are more protective towards the benefits of the citizens and the country as a whole.

As we are aware of the fact that The Government of USA has self owned involvement in energy resources setup and Banking. The rest part of the market is in the hands of private partners. Now to control such a big economy which is mostly under the purview of market players a Country needs Strict Rules and Regulations so as to reduce the business malpractices and economic stability.

The United States have rules such as Anti-Trust laws, Progressive Tax policies and complex taxation system for businesses, Environmental Protection acts, Financial trade commission policies, Securities and Exchange Policies, Food and Drug Regulation Policies etc to protect the Interests of United states and the Citizens living in the country.

As a whole Businesses are always against the Restrictive policies of the Government as the implementation of Taxes are considered bad for business progress. They believe that their efforts are wasted and the profits are less whenever tax rates goes high. The motives of the business is that their self interests should not be hampered at all.

Because of the strict Government policies the consumers are protected from the exploitative practices of the Businesses. It is quite considerable fact that the motive of Government is always protective towards the Citizens and The Country. Many a times these kinds of restrictive policies prosper and economy and sometimes these policies show some adverse effects.

The U.S. Government has statutory control over the energy resources and the Banking so as to protect the reserves that are whole sole property or asset of the country and the future growth is moreover dependent on the energy resources. To protect nuclear reserves, Coal and mineral reserves that are of commercial importance is duty of the Government. We had seen recession during the year 2007-2010 due to the banking sector crash in America engulfed almost all the economies of the world. The modern day trade practices had converted a global community and interdependence among all the trading nations have some pros and cons. Now coming to our point The U.S have made remarkable achievement is regaining its banking sector stability and structural makeover of banking sector in U.S have turned the economic slump into a profitable and progressive economy.

The Anti-Trust law have also made a remarkable achievement by reducing the effects of business frauds, making various compliance for the businesses, making Corporate social responsibility important for compulsory for all the businesses, Financial Audit of the companies compulsory. All these have somehow protected the interests of the shareholders and also controlled the market competition.

If we come to the global trade U.S is one of the biggest traders in the world economy. though we can't say that U.S is a self owned master. Is some parts The Country is dependent on the Imports that are vital important for the country if we trace we will find that U.S is dependent on Gulf countries for the Oil reserves and somehow its economy is moreover dependent on over coming the energy requirements. U.S follow strict trade policies to protect its interests as it focuses on exports by scaling up its production, protects its domestic Industries and Maintaining the Gold reserves so that in need it can print currency to control the trade deficit.

We all are aware of the fact that U.S Dollar is most important trading currency in the world because of the same reason changes in the currency rates effects the trade between the trading partners. U.S. Government always try to remain in Upper hand because higher dollar prices Increases the purchasing power of U.S but restricts the exports as the purchasing power of the other country has diminished in comparison which further is not good for the economy.

United States have restricted the trades with Maxico as it is a border country and Illegal trade had effected the cross-border economy.

The Environmental protection acts have controlled the disposal of domestic and industrial wastes, strict emission norms and reduced greenhouse pollutants have showed the disciplined majors taken in this area.

The Federal trade Commission have been developed to maintain the control mechanism of market monopoly, and misleading advertisements that are showcasing business malpractices.

To stabilize the economy Countries follow both restrictive and liberal polices to make sure that both are to be used according to the situations and at any cost the economic interests should not be hampered at all.

The Government controls both Micro-economic and Macroeconomic effects by devising various monetary and Fiscal policies so as to maintain equilibrium situation. As Monetary and Fiscal policy increases the possibility of Foreign direct Investments, lowers Inflation rates, Increases transparency in an economy and also promotes Political freedom. On the other hand it can't control global recession, discourages business expansion.

The Government of U.S have strict land use policies so as to protect the proper distribution of land and resources have proportionate output for all. The development of Special economic zones, dedicated freight corridors development of transportation via Sea route and Air cargo have increased revenue outcomes.

The trading partners of U.S whether European countries or Asian, all have mutual benefits and maintain various policies with mutual concern. China is one of the major global partner of U.S and the recent China had devaluated the currency Yuan in comparison to U.S Dollar which adversely effected the exports of U.S to China as the prices of U.S. goods increased in China and Resulted in decrease in the prices of Chinese products in U.S. Which can be seen as another trading effect that is to be controlled accordingly.

The Government also follows the policies of providing Subsidies and various other expenditures that are directly beneficial to the lower segment people in an economy. But Majorly it is believed that these type of policies hinder the productivity of other needed area which is helpful for the expansion of economy.

In the last we can say that stringent acts are necessary but are to be used according to the situation which is in the benefit and the interests of the Country and the Citizens. There can be mixed type responses as the policies are not always effective to curb the adverse situation but protective measures are always taken to protect our Interests. The various situations cited in the article have been taken in consideration as of recent events which have strong Political and economic effects into the U.S. The parameters can be different but the active participation of Federal Policies have somehow curb the adverse effects.