America’s Dying Economic Freedom

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Front Page Magazine:

For the first time in the 20 years the Heritage Foundation and the Wall Street Journal have complied their annual “Index of Economic Freedom,” the United States no longer occupies a spot among the top ten nations. After seven straight years of decline, America comes in at number 12, just behind Estonia. Sadly, America’s decline is occurring even as the level of economic freedom throughout the 186 countries analyzed by the Index has reached record highs.

 

The Index analyzes four different categories in order to determine a country’s ranking. They are the rule of law, limited government, regulatory efficiency and open markets. The subheadings under those general headings reveal much of the reason the United States continues to decline.

 

 

Under the “Rule Of Law” heading, America has improved with regard to freedom from corruption, but property rights have declined. Heritage explains that the increasing use of government regulatory agencies to manage economic activity has led to increased perceptions of cronyism and corruption. And while they contend the judiciary functions independently and predictably, there has been an “uneven” protection of property rights that fosters charges of favoritism.

 

Under the “Limited Government” heading, Heritage reveals that spending has increased even as fiscal freedom has declined. The contributing factors are the increase in the personal income tax rate to 39.6 percent, and a corporate tax rate of 35 percent (the world’s highest). Far more ominous, America’s overall tax burden is 25.1 percent of gross domestic income, government expenditures total 40 percent of our Gross Domestic Product, and total public debt is “over 100 percent of the size of the economy.”