Traditionally, the two main tools of fscal policy to create healthy economic growth are taxes and spending, both of which are subject to statutory and Consitutional restrictions. However, inflation, employment and the flow of money can also be affected through regulations, which are hindered neither by the need to collect taxes nor by restrictions on appropriations. Sound fscal policy and fscal law must consider the effects of regulations on economic performance, the proverbial elephant sitting in the room. Regulations, which have been called hidden taxes, play an increasingly greater role in the guidance of the U.S. economy. The recent performance of the US economy provides empirical evidence of the effects of reducing regulations as well as indications of the effects of regulation on innovation. In addition to the traditional primary tools of fiscal policy, taxes and spending, fscal policy and fiscal law must consider the effects of regulations and the use of regulatory policy to affect the economy, inflation, and the flow of money through the economic system.