published Friday, July 6th, 2012

Economic freedom is fading

Despite the Great Recession and the economic troubles facing our nation, the United States' $15 trillion economy still ranks as the largest in the world.

However, measures of the economic freedom within our economy have fallen each year since 2008, according to the Heritage Foundation's annual "Ten Components of Economic Freedom" study. The report, which considers factors of economic freedom including property rights, business freedom, trade freedom and the size of government, has been published annually for 18 years by the think tank.

In 2008, the U.S. scored fifth-best among 184 countries on the 10 facets of economic freedom, behind only Hong Kong, Singapore, Ireland and Australia. Each year since, America has dropped one slot in the rankings, except in 2010 when the U.S. tumbled two spots.

America's performance in the world economy has fallen again to 10th in 2012, barely beating Denmark to stay in the top-10.

So, what?

Two areas measured that contribute to America's decline are fiscal freedom, monetary freedom and size of government. Fiscal freedom has suffered because it has become more difficult for individuals and businesses in America "to keep and control their income and wealth for their own benefit and use."

The size of government has been a culprit in stymieing America's economic freedom on two counts: Through spending, the government "crowds out private economic activity" and "even worse, a government's insulation from market discipline" has caused lower productivity, inefficiency and mounting debt, all ingredients that would've already capsized a private business.

"Rapid expansion of government, more than any market factor, appears to be responsible for flagging economic dynamism," according to the Wall Street Journal's Paul Gigot, a Heritage Foundation partner in publishing "The 2012 Index of Economic Freedom."

Heritage Foundation president Dr. Ed Feulner surmised, "If those who govern acknowledge the limits of government and make necessary policy adjustments, economic freedom can blossom and high growth can once again liberate millions from poverty and joblessness. If leaders instead carry on with ill-guided policies that empower their governments rather than their people, the result is likely, at best, to be economic stagnation and ever-increasing dependence."

Let's cut through the wonk talk. The United States government is preventing economic recovery through policies that penalize work, over regulate those who do and obstruct opportunities for prosperity. Without economic freedom, individuals are guaranteed equal access to poverty and dim prospects for personal achievement and liberty.

Said simply, expansive, rich government makes oppressed, poor citizens.

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nucanuck said...

If only it were so simple!

Economic freedom is a simplistic phrase with a noble sound and little real meaning. Ask three people to define economic freedom and you will get three varying responses. In a sense, our biggest corporations have too much economic freedom. A lack of anti-trust enforcement has allowed our largest companies to grow into multi-national vampires that know no allegiance to any country, avoid taxation, and smother smaller competitors. These large corporation have gained control of Congress through huge power-buying election financing and lobbyists.These large companies have so much ill-gotten economic freedom that they are strangling their hosts. We are witnessing the end-game now playing out as our biggest financial institutions teeter, even after huge amounts of tax-payer money fail to make them solvent.

What many call "big government" is really modern day fascism...big government and big corporatism operating as one to the detriment of the many. Unregulated economic freedom allowed fascism to evolve.

Now what do we do?

July 6, 2012 at 1:08 a.m.
Leaf said...

Yeah, the Heritage Foundation you quote is an ultra-conservative foundation funded by billionaires with their own agenda. I don't think I would take anything they say at face value. They are not exactly champions of the middle class.

July 6, 2012 at 10:09 a.m.
Livn4life said...

Well folks all we have to do is let the current out of control spending continue, ie. let President Obama stay his course and we will soon find out if the bigger government works. On the other hand, if we put the reigns in the hands of the other side, what happens? My guess is not a lot really very differently. Here is the clincher, if the Republicans win the Senate(long shot)and maintain the House of Representatives(very likely)and fail to immediately work to put this country on the right road economically, we will be in a mess no matter who occupies the White House. The man there now seems not to care who's in control of Congress he just does as he desires and seems to dare anyone to be annoying to try to stop him. That is very dangerous. So the vote is acoming, as is the future and there is nothing we can do to stop it. We can however, make our thoughts known at the polls which is a much better place than our spewing on here.

July 6, 2012 at 6:46 p.m.
fairmon said...

Government assurance of competition among businesses has not been effective while government intervention has actually provided an advantage to large corporations to the detriment of small business owners. Much of this occurs at the wholesale level where the larger businesses get major unregulated discounts rebates, etc. not available to their competition. Large corporations have big accounting departments that take full advantage of a complex favor showing convoluted tax system. Too big to fail is a government failure in part resulting from bankers also being investment brokers.

July 7, 2012 at 5:13 a.m.
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