Calls for government intervention in the economy are often promoted as a way to provide relief and fairness. However, many of these proposals bring unintended consequences that carry long-term burdens on businesses and consumers.
For example, as part of the government’s all-out war on “junk fees,” federal agencies are planning to intervene significantly in the private sector and upend many longstanding business models. The downstream effect of such government overreach would harm far more consumers and small businesses than the relative few this misguided proposal claims to protect.
For the last three years, economic ambiguity has badgered small businesses. Indeed, there appears to be no slowdown among cautious small-business owners as they expect more headwinds or even a recession, according to a recent Small Business Check Up Survey.
These entrepreneurs note the challenges on various issues — inflation, rising interest rates and energy costs, among others. The policy attack on “junk fees” would only fuel these pain points and distract from actual solutions that could stabilize the economy and inflationary pressures, which are the source of relentless uncertainty.
Rather than promoting fairness and relief, most “junk fee” proposals would actually backfire on consumers. For example, the Consumer Financial Protection Bureau’s (CFPB) new rule imposing a cap on credit card late fees will ultimately force consumers to bear the brunt of the policy move.
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