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American Entrepreneurship under Threat from Overregulation


American Entrepreneurship under Threat from Overregulation 

(Washington, D.C.) – Small business owners report that the business climate in the United States continues to deteriorate. This trend is causing fewer people to launch entrepreneurial ventures than ever before. In fact, Americans started 27 percent fewer businesses in 2011 than they did pre-recession according to government data.  

While the business startup rate has fallen from 15 percent in the 1970s to 8 percent in 2011, another troubling statistic is the failure rate – more than 27 percent of new companies went out of business in 2011 which is a significant increase from two decades ago. For the first time since the Bureau of Labor Statistics has maintained records, more Americans are employed by large companies than small ones due to the ability of established firms to cope with changing government policies and the growing regulatory environment. 

Daniel Garza, Executive Director of The LIBRE Initiative, released the following statement: 

"America continues to fulfill the dreams and ambitions of many because the entrepreneurial spirit of our people has been allowed to flourish in an environment where hard work and a good idea have the potential to make anyone, from any background, prosperous. However, the continuous growth in the size and scope of government over the past two decades has shown its effects on the private sector as regulations become more untenable which forces small businesses to go under and larger companies to assume enormous costs for compliance. Businesses are being strangled by red tape and individuals face vast and growing limitations on personal freedom in nearly every aspect of their lives. 

Small business owners are the real drivers of the American economy and account for more than 26 million jobs in the United States. Hispanics in particular have maintained a startup rate that is twice the national average, but the continued encroachment from government bureaucracies is threatening the already slow recovery of the American economy. Instead of adding new regulations, policymakers should examine existing ones to ensure that each is necessary, cost-effective and beneficial to both the market place and people's lives."

For interviews with a LIBRE representative, please contact: Brian Faughnan, 571-257-3309 or Steven Cruz, 202-578-6173