U.S. economic freedom declines, yet again
NEW YORK, N.Y. — Good news! On economic freedom, America is in the global Top 10.
Bad news: America is No. 10 — one blond hair ahead of Denmark.
According to the 18th annual Index of Economic Freedom, released Thursday morning by the Heritage Foundation and the Wall Street Journal, Hong Kong enjoys Earth’s freest economy. It invariably has topped this list since 1995. No. 2 Singapore leads Australia, New Zealand, Switzerland, Canada, Chile, Mauritius, and Ireland. Agnostic on political freedom, the Index evaluates fiscal discipline, taxes, regulations, monetary policy, rule of law, corruption, and other measures of economic liberty.
America has slid from No. 9 in 2011 to tenth place today. Indeed, this is the fourth consecutive year in which the U.S. fell a notch. Out of a perfect score of 100, America declined 1.5 points to 76.3. Denmark, No. 11, scored 76.2.
“As recently as 2008, the United States was ranked 7th, rated 81, and considered a ‘free’ economy,” Heritage notes. “Today, it is ‘mostly free’ –the runner-up category.” The Index’s authors add: “Fading confidence in the government’s determination to promote or even sustain open markets has discouraged entrepreneurship and dynamic investment within the private sector.”
U.S. tax-and-spend scores are appalling: Among 179 countries surveyed, America is No. 127 in government spending and No. 133 in fiscal freedom. The U.S. suffers an “overall tax burden amounting to 24 percent of total domestic income,” the Index states. “Government expenditures have grown to 42.2 percent of GDP, and the budget deficit is close to 10 percent of GDP. Total public debt is now larger than the size of the economy.”
Meanwhile, U.S. businesspeople moan beneath the regulatory rubble. “Over 70 new major regulations have been imposed since early 2009, with annual costs of more than $38 billion.”
Another problem: “Corruption is a growing concern as the cronyism and economic rent-seeking associated with the growth of government have undermined institutional integrity,” the Index declares.
What fuels suspicions of American shadiness? Consider Big Labor’s waivers from ObamaCare and the Administration’s granting union payouts ahead of the contractually protected claims of Chrysler’s and General Motors’ secured bondholders.
Republican- and Democrat-approved subsidies for campaign donors in the ethanol and sugar industries also are as crooked as sidewinders. Solyndra’s $535 million contributions-for-loans-for-bankruptcy scandal could have been scripted in Caracas.
No. 7 Chile has surpassed America, confirming the wisdom of its reforms — including its social security system’s wildly popular and highly successful personal-account option. These were inspired by the ideas and disciples of the late, great economist and Nobel laureate, Dr. Milton Friedman, Ph.D.
Even No. 8 Mauritius is economically freer than America, the first time an African nation has left the U.S. behind.
Thankfully, America’s economy is not repressed, like the 10 least free countries: No. 170 Equatorial Guinea, followed by Iran, the Democratic Republic of Congo, Burma, Venezuela, Eritrea, Libya, Cuba, Zimbabwe, and — dead last — No. 179 North Korea. Alas, America is sinking toward these economic dungeons, not climbing away from them.
How can the U.S. reverse course and restore economic freedom? Uncle Sam should put down the fiscal fork and stop devouring national income. Repealing and replacing ObamaCare, junking Dodd-Frank, enacting an optional 15 percent flat tax, and modernizing the slowly imploding Social Security system via voluntary personal accounts all would turbocharge U.S. economic freedom. So would grounding Helicopter Ben Bernanke and hiring Steve Forbes. The publisher would unplug Washington’s monetary printing press and, instead, implement sound money — ideally through the gold standard. This would trump Bernanke’s technique: prying monetary targets from a hat.
Free-marketeers should campaign for economic liberty and hammer President Obama, the fiscally reckless Bush-Rove Administration, and congressional spendthrifts and uber-regulators of both parties. They jointly have battered this formerly pride-inducing aspect of American exceptionalism. Advocates of economic freedom should explain how to prevent the U.S.A. from slouching out of the Top 10 and begin ascending toward the No. 1 spot — right where America belongs.