Guest Editorial: U.S. economic freedom slips
A “solid C,” they call it in school. Not flunking, certainly, but also not excelling. That grade characterizes the score of 75.4 that the United States earned on the Heritage Foundation’s 2016 “Index of Economic Freedom,” which grades countries on such factors as property rights, government spending, business freedom, monetary freedom and fiscal freedom (taxation).
The rankings closely correlate with economic growth. The higher the score — the more economic freedom — the faster people produce more wealth for everyone, from rich to poor.
Any score above 80 is considered “free.” At the head of the class, as usual, was Hong Kong (88.6). Scores from 70 to 79.9 are “mostly free.” So America’s 75.4 score ranked it 11th, just behind the United Kingdom (76.4) and Estonia (77.2). We’re also below sixth-place Canada (78).
A score from 0 to 49.9 is considered “repressed.” At the bottom were the two remaining communist countries. In 177th place was Castroite Cuba (29.8), and rock bottom, 178th place, was erratic dictator Kim Jong Un’s North Korea (2.3).
Our country has scored much higher; in 2007, the U.S. stood in fourth place, with a score of 82. Barack Obama became president in 2009, and his policies largely are to blame for this decline, according to Heritage. But we would add that President George W. Bush was in the White House when the Great Recession hit in 2007-08. And Republicans have controlled the House of Representatives for more than five years since the 2010 tea party rebellion against too much government. That’s significant because all tax bills originate in the House.
“Americans continue to lose economic freedom,” the Heritage Index explained. “Following declines in seven of the past eight years, the United States this year has equaled its worst score ever in the Index of Economic Freedom. Ratings for labor freedom, business freedom and fiscal freedom have flagged notably, and the regulatory burden is increasingly costly.” Also to blame are “damaging monetary policies.”
The Republican presidential candidates generally favor more economic freedom, and the Democratic candidates want more controls. But the dismal economic performance of both parties while in power propels this political season of discontent.