Governments in North America consume directly and indirectly, some 45% of economic output. The trend is towards ever more intrusive and expansive government at all levels of society. Given current spending patterns in the US and Canada within 4 years, over 50 % of all gross domestic output [itself a very flawed measure of economic activity]; will be taken by 3 or in some cases, 4 levels of government. Tearful rhetoric and deceit are used to sell the illogical – massive poverty; the children's future; corporate criminality; 'unfair and unequal' access; security; and of course Mother Earth and Globaloney Warming.

Any serious study will suggest that 30% is the maximum threshold that a government should remove from the total economy. Government has some limited roles – infrastructure, defence, some welfare, and the provisioning of public goods to avoid the 'tragedy of the commons', or the degradation of public assets which cannot be protected or secured by private interests [lakes, parks, wildlife etc.]. Once government grows beyond the 30% of GDP limit, other forces take hold. Bureaucracies grow and expand due to an internal dialectic divorced from reality. Empires are built, union workers are hired, programs are erected, vote buying projects are pushed through, and heart-warming rhetoric or 'end of the world' scenarios are announced. All to feed the beast. Taxes and regulations increase and real job creation, innovation and even the ability over time to provide basic welfare and public services will decrease. In order to manage the peasant the regulating bureaucracies acquire ever more power and control.

Witness the expose in the Wall Street Journal on how regulations destroy jobs in the USA:

“As demonstrated by a series of eight new reports issued in October 2010 by the Virginia-based Institute for Justice, one of the principal obstacles to creating new jobs and entrepreneurial activity in cities across the country is the complex maze of regulations cities and states impose on small businesses.  IJ’s “city study” reports are filled with real-world examples of specific restrictions that often make it impossible for entrepreneurs to create jobs for themselves, let alone for others.” [the study can be found here]

Some aspects of how jobs are killed by moronic regulations and bureaucracies – witness New York City in the 80s and 90s:

Their impact is enormous. The city's mainstream "formal" economy lost some 400,000 jobs in the late 1980s and early 1990s. At the same time, the underground economy has grown and may now represent as much as 20 percent of the city's economy overall.

Restrictive laws-whatever their justification-force entrepreneurs underground. Once underground, these entrepreneurs have little hope of growing their business or obtaining necessary capital. Banks and other financial institutions simply cannot make loans to businesses-whether in-home catering or community transportation-which, although benign and profitable, are not legal. When they seek to operate within the above ground economy, they face time-consuming credentialing or paperwork requirements with practically no chance of ultimately realizing their goal.

So we force people into the grey economy. Then we send the tax police after them. Today LA is remarkable for its dysfunctional anti-capital mentality:

The City of Angels, which had a 13.7% unemployment rate in September, has licensing mandates for every profession under its permanent sun. Anyone wishing to make a living by hanging wallpaper, building fences or trimming trees must first get a by-your-leave from the city in the form of a "specialty contractor" license and a background check that can take years. The same goes for L.A.'s aspiring fashionistas (garment manufacturer license), Washington D.C.'s sightseeing guides (tour guide license), and Miami flower vendors.

Background checks? Are you serious? What type of a demented mind supports such nonsense? If you want to kill job creation, some 50% of which occurs in small firms and startups; than by all means erect a Stasi force which can determine if you are fit or unfit to manage or start a business creation. The Stasis are supported of course by existing businesses who desire a monopoly or oligopoly and all the rent creating power these business forms entail:

In many cases, the regulations were promoted by existing business owners who want barriers to new competition. In Washington, D.C., an interior designers guild succeeded in lobbying the city to require that all new designers take a 13-hour test and get a special license merely to reorganize your living room. In Newark, New Jersey, would-be barber shop owners must prove they've spent three years working in someone else's hair cuttery before they can start their own. Even then, the city's laws bar them from serving customers on Sunday and restrict working hours on other days of the week.

This is called corruption. It also impacts the savings of real people:

In addition to the economic cost of such inanity, the regulations take a personal toll on many aspiring small business owners, often immigrants who thought America was still a land of opportunity. Consider the case of Muhammed Nasir Khan, who lost most of his family's savings thanks to Milwaukee's messy regulations and the whim of a local alderman.

According to the Institute for Justice, Mr. Khan, who once headed Pakistan's antiterrorist operations, sought political asylum in the U.S. in 1995. By working in restaurants and selling the jewelry in his wife's wedding dowry, he and his family saved enough money to open a hot dog stand in a fixer-upper building on a promising corner of downtown. But after hundreds of hours getting everything ready, his shop was closed by the city on its first day of business.

Nice way to help our friends and those who want to help themselves and others.

In Canada there is yet another 'government initiative' [yawn], to stimulate research and development. Another $7 billion dollar waste of time that is:

So, Thursday in Toronto, Gary Goodyear, the minister of state for science and technology, will announce a new blue-ribbon panel that he will task with a few simple questions: Why aren’t we doing better on R&D? Can we get more bang for our $7 billion worth of federal bucks?

Innovation comes from a regime of low taxation, smart but light regulation, common sense standards and codes; and trusting people to be able to manage their own affairs and choices. Innovation comes from your culture, not a government diktat. This is a fact that too few realize – especially those in our ever burgeoning and deeply concerned bureaucracies. For those who love the bureaucracy read about the story of the decline of Venice. Due to over-taxation and the heavy boot of the regulatory state the most dynamic sectors of the Venetian economy including textiles and glass manufacturing left en-masse for England. When they did, Venice went from the nexus of world trade, to a derelict state living off past glories.  Such examples do have pertinence.