U.S. economy falls to an all-time low in the Heritage Foundation’s freedom index rating     

by mcardinal

Matt Bush, FISM News

 

The annual “freedom index rating,” a joint effort between the Heritage Foundation and Wall Street Journal since 1995 which ranks world economies by their “relative freedom,” shows that American has hit a new low in economic freedom.

The index covers 12 “freedoms” in 184 countries and uses an aggregate score on each country to show how free each economy is. In the report, the U.S. economy fell 2.7 points from its 2021 level to a record-low score of 72.1. Not only that, but the U.S. also fell five spots in the international rankings from 20 to 25 after Biden’s first year in office.

According to the report, under President Trump’s leadership, the U.S. economy saw scores of 75.1, 75.7, 76.8, and 76.6. The United States remained in the “mostly free” category but fell from the upper half of the category to the lower half, falling below the countries of Latvia, South Korea, Czech Republic, Germany, and Norway.

In the report’s summary, it noted that the U.S. fiscal health score was historically poor:

The United States continued to decline in the ‘mostly free’ category. Its 0.0 fiscal health score this year is unprecedented.

The report added that “reckless government spending” was one of the main factors for the decline in the overall score, saying, “Business freedom and rule of law are strong, but the economy is being crushed by reckless government overspending.”

The Heritage Foundation website defines and describes economic freedom as, “The fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please. In economically free societies, governments allow labor, capital, and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.” 

To rank the 184 countries in economic freedom, the Heritage Foundation used 12 qualitative and quantitative measures grouped according to 4 broader categories, which include rule of law, government size, regulatory efficiency, and open markets.

Describing the report in relation to the U.S. economy, Heritage President Kevin Roberts said, “This year’s Index of Economic Freedom paints a disturbing picture, both at home and abroad. The decline of American economic freedom is serious cause for alarm and has real and tangible consequences for all Americans, especially low-income families and the working class.”

The report noted that the global pandemic has affected every major economy in the world, especially in terms of the economic freedom in those countries.

The editors of the report wrote, “Most every economy included in the 2022 Index experienced negative growth in 2020, which is not surprising given that so many of the actions that governments have taken in the name of protecting public health have also reduced economic freedom.” They concluded, “These restrictions have exacted a cost in terms of human well-being that must be added to the enormous cost of the death toll from the disease itself.”

The freedom of the American economy has suffered as much as any since the pandemic, with only 8 countries in the top 40 dropping more in their score from the year before. As pointed out by the report, the trillions of dollars in federal spending related to the pandemic is one of the greatest reasons for this drop, which can be seen by the enormous spike in inflation. Rather than pulling back on spending, however, the Biden administration remains intent on trying to pass another massive, pandemic-related, spending bill with Build Back Better (BBB).

On the other hand, countries like Singapore, who tops the list, Switzerland, Ireland, New Zealand, and Luxembourg continue to push economic openness and fewer lockdowns than their counterparts. 

Roberts referenced this difference in ideology saying, “It’s time for the U.S. government to get its fiscal house in order, unleash freedom here at home and help Americans flourish once again through self-governance.”

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