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No. 12 in the Index of Economic Freedom


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no-12-index-economic-freedom-james-pethokoukisNational Review:

Down, down, down she goes. For the first time in the 20-year history of the annual Heritage Foundation–Wall Street Journal ranking of economic freedom, America hasn’t a place among the top ten nations. A continuous, nearly decade-long slide leaves the U.S. economy at number twelve, just ahead of Bahrain and right behind Estonia. Blame “large losses in property rights, freedom from corruption, and control of government spending” for the steady erosion of America’s free-enterprise system. Blame Obamanomics — that, of course, is the unsubtle subtext here.


Both that analysis and the ranking itself are far too charitable toward the current American economy. They’re also too harsh toward the president. Consider social-democratic Sweden, which comes in at number 20. When we look at the Index of Economic Freedom’s ten subcategories, we see that Sweden bests the United States in seven, offering slightly stronger property rights and higher levels of freedom in areas such as trade and investment. Where the U.S. scores big over Sweden is in the subcategory of government expenditure. Spending at all levels of American government consumes 42 percent of our GDP, considerably less than Sweden’s 51 percent.


But that nine-point spending gap between the two nations — equal to $1.4 trillion from the U.S. perspective — is an accounting trick that masks the true size of the vast American welfare state. Start with health care. In Sweden, health-insurance premiums come from taxes. In the U.S. — at least until Obamacare subsidies take effect — they’re mostly deducted from paychecks or contributed directly by employers. Either way, workers have less after-tax income. And when those employer-sponsored premium payments are accounted for, according to the Manhattan Institute, total U.S. spending amounts to roughly 48 percent of GDP.Scissors-32x32.png

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