Advantages of Present Deregulation Strategies in Terms of Economics
The Trump Administration has implemented a series of deregulatory actions aimed at reducing regulatory burdens on American households and businesses. These measures, spanning across various sectors, are estimated to have yielded tens of billions of dollars in cost savings for businesses.
From 2017 to 2021, and again from 2025 onward, the Administration targeted financial, energy, and administrative regulations. Notable deregulatory measures include the significant reduction of compliance costs by rolling back provisions of the Dodd-Frank Act, easing capital requirements, and lowering regulatory burdens on large banks like Goldman Sachs. This deregulation is believed to have contributed to boosted profits, as exemplified by Goldman Sachs’ $11.5 billion net income in 2021, partly due to these cost savings.
In the energy sector, the Department of Energy eliminated or streamlined over 47 costly regulations, rescinded mandates such as energy conservation standards for appliances, and simplified procedures for natural gas imports and permits at international boundaries. These moves represent milestones in unleashing energy potential and reducing operational burdens on businesses in energy.
Furthermore, an executive order expedited federal permitting for AI data centers and related infrastructure, aiming to reduce project delays and associated costs.
While exact savings for households are not detailed, the cumulative effects of these deregulatory measures are framed as easing operational and compliance costs for businesses, which can indirectly lower consumer prices and foster economic growth. The total estimated cost savings from finalized deregulatory rules alone exceeds $75 billion.
Upon returning to office, President Trump froze all regulatory proposals still in the approval process, potentially saving Americans over $180 billion. The President's strategy for long-run regulatory reduction includes a 10-to-1 regulatory budget, requiring that 10 existing rules must be eliminated for every new rule introduced.
If the potential cost savings from rolling back Biden Administration rules is annualized over a 20-year period, it is equivalent to a 0.29 percentage point increase in annual economic growth, assuming every dollar of regulatory cost reduces gross domestic product by a dollar. The Trump Administration's deregulatory agenda could generate additional savings, as President Trump's 1-in-10-out regulatory budget is expected to continue.
The Administration launched a multi-agency initiative to rescind Federal regulations that contribute to higher living costs. A 10-year moratorium on regulation growth could reduce the inflation rate by 0.60% annually. Using the Office of Management and Budget's (OMB) rules of thumb, this additional economic growth generated by deregulation could reduce the Federal deficit by between $1.1 and $2.9 trillion over 10 years.
Sources:
- Regulatory Data Report
- White House Fact Sheet
- Goldman Sachs Earnings Release
- White House Fact Sheet: American Energy Independence
- The Trump Administration's deregulation of financial regulations, including the rollback of provisions from the Dodd-Frank Act, has potentially led to increased investments in the finance sector, contributing to businesses' profitability.
- In the food sector, the Administration's deregulation of energy regulations has allowed for streamlined procedures for natural gas imports and permits, which could potentially lower energy costs and affect food production and distribution.
- The Administration's deregulation in the science and environment sectors, such as the removal of costly regulations by the Department of Energy, might stimulate technological advancements in energy production, potentially impacting the health of the planet and human life.
- The streamlining of procedures for AI data centers and related infrastructure could possibly lead to rapid technological advancements in various business sectors, including finance, health, and technology.
- The Administration's deregulatory measures, aimed at reducing regulatory burdens on businesses, are estimated to have indirectly benefited households by potentially lowering consumer prices and fostering economic growth. The savings from these deregulatory measures are estimated to exceed $75 billion.
