Study: U.S. No Longer Has a "Free" Economy

[Greg Fasolt]

by James W. Harris

The amount of economic freedom in the United States fell significantly in 2009,
according to a respected annual survey.

For more than ten years the Index of Economic Freedom, a joint publication of The
Wall Street Journal and the conservative Heritage Foundation, has ranked the countries of the world by the amount of economic freedom they have.



The study focuses on ten fundamental economic freedoms: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labor freedom.

The 2010 Index was released last month, covering the year 2009.

The United States dropped to number eight on the list, its lowest ranking ever.

Worse, for the first time the U.S. dropped out of the Index's "Free" category into the next category of "Mostly Free."

Ranking ahead of the United States in economic liberty are, starting with the freest, Hong Kong, Singapore, Australia, New Zealand, Ireland, Switzerland, and, yes, Canada.

America's plunge in the rankings is due to a variety of anti-market policies, including increasing tax rates and government spending.

"The U.S. government's interventionist responses to the financial and economic crisis that began in 2008 have significantly undermined economic freedom and long-term prospects for economic growth," say the Index editors.

"[U.S.] economic freedom has declined in seven of the 10 categories measured in the Index."

Of the 179 countries graded in this year's Index, only seven scored high enough to qualify as having a "Free" economy. Another 23, including the U.S., had sufficient economic liberty to rank "Mostly Free."

The Index clearly shows that economic liberty is vital not just for prosperity, but for personal freedom and protecting the environment.

"The 2010 Index provides strong evidence that economic freedom has far-reaching positive impacts on various aspects of human development. Economic freedom correlates with poverty reduction, a variety of desirable social indicators, democratic governance, and environmental sustainability," notes the Index.

"Economies classified as free or mostly free also do a much better job promoting human development, reducing poverty and protecting the environment."

Source:
The Liberator Online published by the Advocates for Self-Government