Economic freedom is fading

Economic freedom is fading

July 6th, 2012 in Opinion Free Press

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.