American economic freedom continues to fade

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The 2016 Index of Economic Freedom, released Monday by the Heritage Foundation and the Wall Street Journal, highlights the urgent need for the United States to change course. For the eighth time in the last 10 years, America has lost ground – its score of 75.4 points out of a possible 100 equals the country’s previous low in 1998. Today, the United States ranks 11th on 178 economies rated, behind developed countries including Switzerland (fourth), Australia (fifth) and Canada (sixth).

Countries in the index are ranked on 10 factors of economic freedom, including size of government, regulation, corruption, taxes and open markets. Factor scores are averaged together and countries are ranked regionally and globally.

The U.S. score fell repeatedly during the Obama years thanks to dramatic increases in government spending and regulation, a failed stimulus program that enriched average but well-connected Americans, and laws such as the Affordable Care Act, which denied the right of individuals to keep the health plans they already had, and as the president had promised.

Meanwhile, 32 countries – as diverse as Germany, Vietnam, Angola and Israel – now enjoy higher levels of economic freedom than ever before. Of the 186 countries in the index, 97 improved their position compared to 2015.

Increased economic freedom in countries like India and the Philippines has brought increased prosperity, better health and education, and a cleaner environment to hundreds of millions of people. The globalized economy also offers tremendous opportunities for growth in countries open to international competition. It is no longer a fantasy to glimpse the end of poverty in the world.

Given the gains elsewhere and the continued regression in the United States, it’s no wonder so many Americans are angry this election year. As the index notes, they endured an entire decade in which “government patronage of entrenched interests stifled innovation and contributed to a lackluster recovery and stagnant income growth.”

About five million fewer Americans are employed today than would be expected had historical trends prevailed. Assistance programs such as disability insurance and food stamps, necessary for some but relied upon by increasing numbers of Americans, cannot provide the same level of dignity, self-esteem and independence that comes from keeping a job successfully.

After its own series of declines in economic freedom that had propelled it to 16th place according to the 2010 index ranking, the UK rebounded into the top 10. It did so by reducing its tax on companies, controlling spending and reducing deficits. Estonia and Lithuania, which languished for decades under the Soviet Union, have become the ninth and thirteenth freest economies in the world by opening their borders to trade and investment. Despite growing pressure from mainland China, Hong Kong has maintained its commitment to economic freedom and remains in first place.

In the decades following World War II, American leaders introduced the principles of economic freedom – the rule of law, limited government, regulatory efficiency and open markets – to people around the world. The 2016 Index of Economic Freedom and examples from newly prosperous nations underscore the need for Americans to rededicate themselves to these principles.

Mr. Miller is co-editor, with Anthony B. Kim, of the Heritage Foundation’s 2016 Index of Economic Freedom.

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