• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Morning Bell: So, You Think You're Free?

    So you think you’re free? Thanks to big government spending and exploding debt, the United States — and indeed the world — is less economically free today than it was a year ago, according to the 18th annual Index of Economic Freedom, released yesterday by The Heritage Foundation and The Wall Street Journal.

    Economic freedom — the ability of individuals to control the fruits of their labor and pursue their dreams — is central to prosperity around the world. Heritage and The Wall Street Journal measure economic freedom by studying its pillars: the rule of law, limited government, regulatory efficiency, and open markets. Things like property rights, freedom from corruption, government spending, free trade, labor policies, and one’s ability to invest in and create businesses all factor in to a country’s economic freedom.

    Sadly, economic freedom declined worldwide in 2011 as many countries attempted — without success — to spend their way out of recession. The editors of the Index explain what has led to this troubling decline:

    Rapid expansion of government, more than any market factor, appears to be responsible for flagging economic dynamism. Government spending has not only failed to arrest the economic crisis, but also–in many countries–seems to be prolonging it. The big-government approach has led to bloated public debt, turning an economic slowdown into a fiscal crisis with economic stagnation fueling long-term unemployment.

    Though some might think that the United States — the land of the free, the home of the brave — is of course a leader in economic freedom, they would be wrong. The United States fell to 10th place in the world for economic freedom, and its score continues to drop. The U.S. ranked 6th in 2009, 8th in 2010 and 9th in 2011.

    Heritage President Ed Feulner writes, “Under President Barack Obama, [the United States] has moved to the back of the band. Its economic freedom score has dropped to 76.3 in 2012 from 81.2 in 2007 (on a scale of 0-100).” The culprit? Government spending, which has grown to a level equivalent to over 40 percent of GDP, and total public debt, which exceeds the size of the economy.

    Americans have been feeling the effects of the exploding government and resulting reduction in economic freedom. Some 13.1 million Americans are out of work, the unemployment rate has hovered between 8 and 9 percent, and the economy has merely been plodding along on the road to a very slow recovery. Though 200,000 jobs were added in December, Heritage’s James Sherk and Rea Hederman Jr., write, ”At that pace, the unemployment rate will not return to normal levels (or 5.2 percent) for four and a half years–not until September 2016.”

    America’s job creators know that it’s the policies emanating from Washington that are constraining their ability to create new jobs. According to a new survey of small businesses by the U.S. Chamber of Commerce, more than 80 percent are very concerned about the prospect of new regulations, mandates, and higher taxes. There’s another thing Americans should be worried about, as well: According to the Index, the United States has seen its “Freedom from Corruption” score drop, as well, due to the Obama Administration’s pursuit of increased regulations. As Feulner writes, “Each new edict means a new government bureaucracy that individuals and businesses must navigate. Each new law opens the door for political graft and cronyism.”

    The United States isn’t alone in the trend away from increased economic freedom. Canada and Mexico lost ground in the Index, and 31 of the 43 countries in Europe saw reduced freedom, as well. Given Europe’s huge welfare programs and out-of-control social spending, that’s unfortunately not surprising. As the world suffers the economic repercussions of Europe’s debt crisis, the price of pursuing policies that constrict economic freedom should be clear.

    For all the bad news that the Index uncovered, there is some good news for economic freedom around the world. Four Asia-Pacific economies–Hong Kong, Singapore, Australia and New Zealand–lead the Index with top scores this year, Taiwan has seen increased gains in economic freedom, and eleven of the 46 economies in sub-Saharan Africa gained at least a full point on the Index’s economic freedom scale. And Mauritius eighth place score is the highest ever achieved by an African country.

    Much of the world, though, isn’t so lucky. While some countries have seen their economic freedoms increase, others such as India and China are constrained by government control and bureaucracy. Considering that areas like health and education are highly correlated with high levels of economic freedom, governments would serve their people well by pursuing the freedoms that many in the rest of the world enjoy.

    Likewise, the United States would be best served by pursuing an agenda of economic freedom at home, too. The liberty to pursue happiness and profit from one’s talents and abilities is central to the American ideal. The Land of the Free should work to ensure that ideal is not just a dream but a reality as it leads the world by example in the quest for greater economic freedom.

    Quick Hits:

    Posted in Economics [slideshow_deploy]

    34 Responses to Morning Bell: So, You Think You're Free?

    1. Viet Nam Vet 67-68 says:

      Since we the People have no representation from either side of the Isle in Congress to do what is needed we the People must either replace 532 in Congress or vote Ron Paul in as President. If only the voting public would look at the records of the other candidates versus Ron Paul the clear choice is Ron Paul. Stop listening to what they say and look at what they have done, their voting records are available to the public if you will only take the time to review what these Rhino/Socialist say what you want to hear but I will do what I want when I am in office. We have had enough haven't we? Obamanation promised hope and change and we have gotten No Hope for Change unless you think Communism and the Muslims taking a foothold in America hope and change and $5 Trillion spent with $0.00 Return on investment. Where did $5 Trillion Dollars go I see no new Roads/Bridges/New Power Grids or JOBS, what I do see is every Obamanation supporter Filthy rich on our TAX Dollars.

    2. bassboat says:

      This solution for becoming freer will fall on deaf ears as the critics have not read the book, The Fair Tax. If this were passed power would leave DC and be put where it belongs, in the hands of the people. This would be the first step towards a freer economy. Until then, there will be constant tinkering of our economy by people who know zero about wealth creation.

    3. Alcon says:

      Here is further proof of socialistic progress, a gift from the Obama administration. There is only one solution to reversing this trend and saving America from socialism and that is to put an end to this administration quickly. The agenda of this president and his henchmen is well on the way to destroying our democracy.

    4. toledofan says:

      The solution is simple, stop all unnecessary spending, the reality is that as long as the Democrats are in control there will be no restraint and spending will continue to skyrocket. I think the Republicans lost the public opinion battle and squandered away a lot of political capital during the 2010 midterms and were handed there butts during the debit ceiling debacles. We need a leader and I'm not sure one is in the waiting.

    5. sdfultz says:

      President Obama, spending policies required due to Presidents Bush's failed policies? Humm!

      • John Salo says:

        Sir:
        This problem has been caused by 30 years of poor leadership of which Obama had little to do with,

        Unfortunately You can't solve the problem in 3 or 4 years. Japan is still trying to change its economic direction after 25 years. Its stock market once at 35,000 is now at 8000. Big mistakes take long times to correct.

        Diogenes

      • Rick_in_VA says:

        And pigs fly.
        If only Obama would come up with another excuse. This lie is getting old.

    6. Curt Krehbiel says:

      "Much of the world, though, isn't so lucky. While some countries have seen their economic freedoms increase, others such as India and China are constrained by government control and bureaucracy."
      And the United States of America is not?

    7. Frank says:

      We are losing our Freedoms, people! WAKE UP.
      Both the Ds & establishment Rs are doing it to us with their Big Government approaches.
      Is there a Small, Constitutional Government voice crying in the wilderness? Yes!
      Listen to it before it's too late!

    8. Edward P.Woolley says:

      Gov.Perry and speaker Gingrich made a gargantuan mistake.The so called conservative media(FOX) and the republican establishment do not understand or do not want to understand the difference between venture capitalism aand vulture capitalism.Venture capitalism is advancing money to start a business that hires people.Romney & his cohorts highjacked the word just like the word "gay" by some other people.They advocated the premise that buying companies for pennies on the dollar,firing employees ,and if that did not lead to proffitability,selling the assets of the company and filing bankruptcy,or moving the company to a third world country for low wages for employees.An example of of true venture capitalism is investing in drilling for oil where the odds are ten to one against you for finding oil and that the end result is that you are successful and find oil.This puts people to work and even if not successful.If successful you continue to hire more people!The Republican establishment doesn"t want to understand this.They have picked Romney….The media has set out to destroy Rick Perry!They will not explain the difference between "venture capitalisn " and "vulture" capitalism.

    9. Gael says:

      "…Through unprecedented intervention by the U.S. Treasury, Paulson led government efforts which he said were aimed at avoiding a severe economic slowdown, after the Dow Jones dropped 30% and turmoil in the global markets….In late September 2008, Paulson, along with Bernanke, led the effort to help financial firms by agreeing to use $700 billion dollars to purchase bad debt they had incurred…." Paulson worked for Bush, no? The US (and world) economy is still spiraling from Wall Street's reckless greed and Obama is stuck with trying to fix a corrupt and broken system. Fair-minded people are winning. Cheaters and misanthropes are being exposed.

    10. Russell says:

      The ratio between goods and services is proportional or relative to technology. The more technology the more service can be obtained. However when the services out pace the goods then debt takes over. Governments are nothing but service. So when we the government goes into debt we know it is to big. The only problem in cutting back government is the people demanding more and more welfare and subsidies and all the other agencies that are not required.

    11. John Salo says:

      Sir:
      You refuse to open your eyes – the problem is large companies that are not capitalistic and are not democratic
      are driving the train. To keep harping the same mindless crap will not change anything.

      If you take the two trillion dollars given to Citi Corp ( Yes two Trillion) you could create 500,000 jobs
      at 20$ an hour for one year. So who are you people kidding.

      Diogenes

    12. Don says:

      I hope when we Christians vote we pick a man who cares about Freedoms, We are losing all of our freedoms fast! I will vote for a Man that has Christian values and has a proven work record to put Americans back to work where we don't have to become dependent on our corrupted Government leaders, ask yourself who do you want to guide your country darkness or light ! a person that does what good for themselves Or whats good for our future and our Children and their Children's Children, We have let polices rule us that was implemented by selfish Men, Not by Rule of God but by order of Men of darkness! GOD HELP US P.S That's supports Israel!

    13. Rick_in_VA says:

      What too many people don't realize is the fact that not only our economic freedoms are dwindling.

    14. John Cochrane says:

      This is a great article. It should get more exposure. People don't realize what's happening to us. Thank you John near Philadelphia

    15. ThomNJ says:

      A fair tax and the abolition of property taxes (yeah, I know – never gonna happen) would make us incredibly free. Being able to run government on a fixed income would necessarily help limit government overreach, and eliminating property taxes would allow one to retire in their own home, for one example, rather than having to sell when income can no longer keep up with the tax increases.

    16. PADDY O says:

      As far as I'm concerned I believe Obama has been working to break our country economically for all of his adult life! This is just a continuation of his efforts!

    17. Ron W. Smith says:

      Every time I see "free" in a Conservative post, I think there must be a mistake. "Poor" has to be what is meant since the dollar is eroding just about daily and more and more people are slipping from the Middle Class. The drumbeat, from the Right, against workers' right to collectively bargain–collectively to keep the better wages, better benefits, and better work conditions they've gained from the union movement's successes starting especially in the early 1950's–has been so regular. A labor force voiceless, compliant, underrewarded, overworked and working in reduced conditions seems to be the aim, something I call a nostalgia for slavery among those whose compensation has been growing geometrically in recent decades.
      "Economic freedom"? Surely we're talking about "poor," not "free," aren't we?

    18. Edward P.Woolley says:

      It is regretful that what a member of the heritage foundation is monitored like you were some left wing nut.Been a member of heritage for years.who is the "monitor"?

    19. Edward P.Woolley says:

      It is regretfull that what you write on this opion page is monitored for political correctness and this persons opions.Been a member for three years….Is heritage becoming fox news?

    20. Ben C. says:

      Two points:
      1) I dare anyone to try to open a new business let alone move an existing business. The required fees for site plans etc are prohibitive. Just too many hoops.
      2) I am looking for a Wall Street Occupier to assume my debt and pay my employees. I have asked several in Ann Arbor that if they think I have it so good would they carry my debt load. No takers yet.

    21. Joseph McKennan says:

      The top 4 in the world for economic freedom include Australia. Australia's leader has issued notice to those who come there that " this is how we live and how we do things. If you do not like it … then your are free to go back where you came from". This is not an actual quote but a paraphrased version.

      One of our greatest problems in the US is that we have allowed our leaders to attempt to change our national identity. We are not perfect but we were not afraid or our president before 2009. Change, change means socialism, government control,and loss of economic freedom. It is not rocket science.

    22. Whicket Williams says:

      The best thing we can do is Elect Ron Paul Anything else will be a disaster.

    23. Glen says:

      After being on this planet for almost seventy years, I can not believe what is happening to America. This is the most corrupt government i have ever seen. I know i won't be around to see the final outcome, but I sure fear for my grandchildren. I hope the people of America wake up before it is too late.

    24. Blair Franconia, NH says:

      The slooooooooooooooooooow road to tyranny. DA, TOVARICH? DA!

    25. Jose Luis Lira says:

      Freedom of thought … (that is) is about the only one thing we can claim that is free .. unless you're already brain-washed to believe otherwise. "Observe and learn" .. said Plato. So, I am affraid to say that, its clear that those who claim or swear to uphold and protect the law of the land (United States Constitution), just DON'T practice what they preach.

    26. Bobbie says:

      the government and it's expense has become excessively regulating through speculation, overly intrusive, over powering, smothering the businesses freedom, right and abilities to govern their own.
      the more government control the less freedom or reason to control ones own…
      The government doesn't create jobs, the government creates bureaucracy that creates tax increases that pays for impractical, non productive jobs that serve special and conflicts of interests!

    27. terry w. bradley says:

      I'm a 77 yr old West Texas rancher and I have come to the conclusion that the only way the people of Texas are going to be free is to re-establish the Texas Republic. As Gov. Perry has outlined Washington is broke. I believe that we have passed the point of no return. We kill over a million created human beings a year lawfully. How in the world could we claim to be an exceptional nation?

    28. TG31 says:

      The only candidate who has suggested to return to SMALL government, states' rights, audit the Fed, bring the troops home to ensure our NATIONAL defense and to stand up to the globalists and military/industrial complex is Ron Paul. It does not take a genius to see that all the others are on the side of the establishment although it does take time to sort through information to acquire an informed opinion on the issues. We had better make the right choice or see our country go over the cliff.

    29. RICHARD D. STACY says:

      Courses in comparative economics, with emphasis on capitalism, should be mandated in all schools in the United States. America should be proud enough of its powerful economic system to make its study an educational requirement !! In my opinion, it is our abysmal ignorance of the basic rules and idiosyncrasies of capitalism that has been a major factor in our current financial morass !!

    30. Cosmo says:

      The real unemployment rate is closer to 11%. We need to start telling the truth about that.

    31. Endo says:

      Notice how not one of the ahead of the US has a "free market" health care system. *All* have strong government involvement in their delivery of (universal) health care.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×