U.S. Economic Freedom
Plummets to 18th Place Globally, Study Shows by Alex Newman
Due in large part to an
explosion of government spending and less secure property rights, the United
States plunged to its lowest ever ranking on the Economic Freedom of the World report, dropping from second place out
of 144 nations in 2000 to a humiliating 18th in this
year's annual survey. The global average scores, meanwhile, actually increased
slightly.
The study, conducted by
the respected Canada-based Fraser Institute, measures more than 40 different
variables related to economic freedom. Thoseare divided into five broad
categories: size of government, legal system and security of property
rights, access to sound money, freedom to tradeinternationally, and regulation
of credit, labor, and business.
"The United States,
like many nations, embraced heavy-handed regulation and extensive over-spending
in response to the global recession and debt crises," observed Fred
McMahon, Fraser Institute vice-president of international policy
research. "Consequently, its level of economic freedom has dropped."
And it is getting worse, fast.
According to the survey,
the United States scored 6.43 out of 10 in terms of the size of government -
slightly lower than Syria, ruled by socialist tyrant Bashir al-Assad. The
steepest decline was in the protection of private property rights, which
analysts attributed to
increasing reliance on eminent domain, the expansion of the terror and drug
wars, as well as an uncertain business environment sparked by lawless
government bailouts and breeched contracts. Overall the United States scored
7.69 out of 10
"I think we think
of the underlying causes of our decline in legal system and property rights,
the Supreme Court's Kelo decision, the war on terror, and things related to the
rule of law - things like TARP and the bailouts - have all contributed to the
decline of scores in areas
one and two,"explained one of the report's authors, Beloit College economics Professor Joshua Hall.
"We need people to understand our long term living standards depend upon
getting back to that economic freedom that we enjoyed just a decade ago." Despite the increasingly
unstable U.S. dollar being inflated away by wild Federal Reserve currency
printing, America performed fairly well in the "sound money" category
on the index - at least for this report.
However, experts warned that when inflation begins to accelerate thanks to the Fed's ongoing "quantitative
easing" policies, U.S. economic freedom scores will plummet much further.
Compared to just last
year, American economic freedom - once considered the global gold standard -
plunged 10 spots. The dramatic decline appears to be accelerating, too, as all
levels of government continue to borrow and spend their citizens into
oblivion while dumping increasing amounts of economy-destroying regulations on
the populace.
"It is a travesty
that our country is spiraling away from the principles that have made us an
economic beacon for the world,"
said Americans for Prosperity chief Tim Phillips, adding that the United States
has essentially lost a full decade worth of growth. "This report shows what many
fiscal conservatives have known all along, that our long-term growth is being
threatened because big-government economic policies have grown the size of
government, increased regulation and are now reducing our economic
freedom and future prosperity."
At the top of this
year's global rankings were
Hong Kong in first place, followed
by
Singapore, New Zealand, Switzerland, Australia, Canada, Bahrain, Mauritius,
Finland, and Chile at number 10. Also finishing above the United States were
welfare states like Finland and Denmark, as well as countries ruled by
strongmen like Qatar and the United Arab Emirates. Estonia, formerly part
of the Soviet Union, came in at 14 as it speeds down the road toward a freer
market.
On the other end of the
spectrum were nations like socialist Hugo Chavez's crumbling Venezuela,
Zimbabwe, which is ruled by Marxist despot Robert Mugabe, Myanmar, Congo, and
Angola - some of the poorest places on earth.
Communist dystopias like
Cuba and North Korea were not included on the list, but presumably those
dictatorships would have also ranked at or very close to the bottom of the
barrel.
Among the larger
economies, Communist China came in at 107, Brazil at 105, India at 111, Japan
at 20, Germany in 31st place, and Russia at 95. The United Kingdom tied for
12th with Ireland, both placing well above the United States. Overall, the
global average rose slightly to 6.83 out of 10 for the most recent year
available, up from 6.79 the previous year – the lowest level in close to three
decades.
Countless studies have
shown that economic freedom in closely linked to prosperity, as evidenced by
comparing leading indicators of well-being - health, income, growth,
employment, stability, literacy, infant mortality, and more - with government
respect for the free-market system.
Unsurprisingly, rich
countries generally have far more economic freedom than poorer ones. See
Korea. "Sadly, citizens
living in the bottom-ranked countries face a significantly lower quality of
life since they lose the benefits that come from growth spurred on by economic
freedom and suffer reduced prosperity," the Fraser Institute's McMahon
explained after releasing the report. Even poor people in freer countries are
often far better off than average citizens living under economically oppressive
regimes.
While the Fraser
Institute's study shows the most significant plunge, other respected surveys
have also shown the U.S. economy in an accelerating tailspin compared to the
rest of the world. The Heritage Foundation's Index of Economic Freedom, for
example,
showed America sinking for a fourth consecutive year - dropping from ninth to
tenth place and solidifying its designation as "mostly free"
earned in 2009, down from "free" the year before that.
"Restoring the U.S.
economy to the status of a 'free' economy will require significant policy
changes to reduce the size of government, overhaul the tax system, and
transform costly entitlement programs," the Heritage study's authors explained.
"By boosting growth in the private sector, such freedom-enhancing policies
are the best hope for bringing down high unemployment rates and reducing public
debt to manageable levels."
In terms of
competitiveness, the U.S. economy is doing poorly as well. According to the
World Economic Forum's Global Competitiveness Index, the United States dropped
to seventh place behind Sweden, Finland, Germany, and other countries due
largely to exploding government debt and deficits. Liberty-minded Switzerland
took the top spot from America in 2009 and has remained in first place ever
since.
"The United States
needs to drastically shrink the size and scope of the government in our economy
in order to reclaim a spot among the freest countries in the world," noted Suffolk University economics Professor Benjamin Powell, a senior fellow at the
Independent Institute. "Unfortunately, that doesn't appear to be on the
agenda of either presidential candidate. I guess that shouldn't be a surprise
since it was the big government branch of both political parties that decreased our
freedoms over the past dozen years."
While the economic
freedom and the prosperity it entails continue to evaporate in the United
States, more than a few governments have apparently started to learn the
lesson: liberty works, big government does not. For centuries, the U.S.
Constitution has restrained the coercive power of the federal government,
contributing to the creation of the most prosperous society the world has ever
known. But according to economists and experts worldwide, if the U.S.
government does not reverse course soon, the consequences for the American
people and indeed the world will be tragic.
Source:<http://thenewamerican.com/economy/economics/itemlist/user/68-alexnewman>
Written by Alex Newman Friday, 21 September 2012 09:46 <http://thenewamerican.com/economy/economics/item/12925-us-economic-freedom-plummets-to-18th-place-globally-study-shows>
Study Source <http://www.freetheworld.com/release.html>
Economic Freedom of the World report, dropping from second place out of 144
nations in 2000 to a humiliating
18th in this year's annual survey
Comments:
The
study says we need to decrease the size and scope of government, restore our property rights (ban UN Agenda 21), remove unnecessary
regulations and stop printing money. Who are you going to vote for ?
Norb
Leahy, Dunwoody GA Tea Party Leader