Millions of people around the world are being lifted out of poverty by increasing economic freedom. But in stark contrast, America’s economic freedom has declined over the past decade.
America’s declining score in the index is closely tied to rapidly increasing government spending, grants and bailouts.
According to the 2016 Index of Economic Freedom, an annual publication of The Heritage Foundation, American economic freedom has fallen. With economic freedom losses in eight of the past nine years, the United States tied its all-time worst score, wiping out a decade of progress.
The United States fell from the 6th freest economy in the world, when President Barack Obama took office, to 11th place in 2016. The drop in the American score in the index is closely linked to the rapid increase government spending, subsidies and bailouts.
Since early 2009:
- Government spending skyrocketed to $29,867 per household in 2015.
- The national debt has risen to $125 trillion for every household filing in the United States, a total of more than $18 trillion.
- Government control over health care drives up prices and disrupts markets.
- Bailouts and new government regulations have increased uncertainty, stifling investment and job creation.
This is not something to be taken lightly. Economic freedom is the foundation of America’s economic strength, and economic strength is the foundation of America’s high standard of living, military might, and global leadership. The dangers of losing economic freedom are not fictional.
It is painfully clear that our economy has performed well below its potential, with individuals, families and entrepreneurs squeezed by the proliferation of bureaucracy and big government regulations.
As documented by the Index, and by other researchers, America’s economic freedom has declined at an alarming rate.
Indeed, as the Wall Street Journal recently succinctly summarized, Obama is “a champion when it comes to limiting economic freedom, and American workers have the slow growth of jobs and wages to prove it.” .
Unsurprisingly, our economic dynamism and our capacity for innovation have been significantly reduced.
Unsurprisingly, our economic dynamism and our capacity for innovation have been significantly reduced. Self-inflicted injuries include:
- The United States has the highest corporate tax rate in the developed world. This drove new jobs to other more competitive countries and led to fewer jobs and lower wages for Americans.
- The overall annual cost of meeting regulatory requirements has increased by over $80 billion since 2009, with over 180 new regulations in place. In terms of the ease of starting a new business, as analyzed by a recently published report by the World Bank, the United States is ranked surprisingly low at 49th, behind countries such as Canada, Georgia, Ireland, Lithuania and Malaysia.
It is no wonder that the labor force participation rate has remained at near record lows after more than five years of steady decline.
Worse still, dynamic entrepreneurial growth has been hampered by greater political uncertainty and mounting debt. And a disturbing trend of cronyism has seriously eroded the rule of law and distorted our free market system.
House Ways and Means Committee Chairman Kevin Brady, R-Texas, keynote speaker for the official release of the 2016 Index, recently said:
It’s been almost seven years since Obama’s “recovery” began, and our economy is barely out of neutral. Why does America have to settle for that?
Restoring economic freedom is a prerequisite for America’s revitalization and future. 2016 is the year to reaffirm the principles of limited government, free enterprise and the rule of law so that we can rebuild an America where freedom, opportunity and prosperity flourish.
It’s time to act.