How is 600B a year in global imperialism cutting anything?
Unsurprisingly, you can't just stick "size of government" on an axis and say one side is good and the other is bad. The way you spend the money matters way more than how much you spend. One dollar of state spending can mean anything from magnitudes of benefit to a negative impact on the economy or society from the consequences of that dollar.
Let's talk about how regulatory enforcement can be compromised without actually shrinking government size, budget, or jobs.
First, there's regulatory capture[1]. In short, the regulated industry ends up writing its own regulations. As a result, the regulations just enshrine business practices as they are. The total size of the regulatory regime can even increase because of the second aspect of regulatory capture. When an industry captures the agency, it can seek to make the rules purposely byzantine and vague, in order to ensure that almost any business practice can be defended, provided one has enough legal muscle.
Regulatory capture is what people who root for Uber's business model demonize. The car-for-hire industry, they say, is regulated in such a way as to keep the taxi industry profitable even if the service is, they claim, subpar.
Second, there's policy that goes under the names "regulatory reform" or "regulatory relief"[2] Here, the regulations themselves are not subject to change or reduction, only the effort by the government to do meaningful enforcement is cut. This is what we see around the US role and reaction to the 2007-2008 global financial crisis. Laws that could have been used to prevent this event, or to prosecute the executives responsible, do exist. Violations are simply not prosecuted.[3]
For others who are asking about measurable ways government regulation has decreased[4], don't look as the size of the CFR, look at the relationship of the regulations with existing business practices and the current low-enforcement regulatory regime.
Finally, one might ask, if the regulations are so business-friendly and enforcement so lax, why hasn't the size of the regulatory workforce shrunk? Well, of course it has, but also, a big regulatory regime is a barrier to entry for competitors. The most profitable companies don't want competition, so they are happy to have regulators help them ensure that what they do is legal, while making sure that compliance is expensive and difficult enough to deter new entries into the markets.
