Published by the Heritage Foundation and the Wall Street Journal, the index for the last 20 years has measured a nation’s commitment to free enterprise on a scale of 0 to 100 by evaluating 10 categories, including fiscal soundness, government size and property rights.
As the U.S. economy languishes, many countries are leaping ahead, thanks to policies that enhance economic freedom—the same ones that made the U.S. economy the most powerful in the world. Governments in 114 countries have taken steps in the past year to increase the economic freedom of their citizens.
Countries achieving higher levels of economic freedom consistently and measurably outperform others in economic growth, long-term prosperity and social progress.
The fact is that economist and philosopher F.A. Hayek correctly observed that a large central government and excessive taxes and regulation are great drags on a nation’s economy. That is why we can see other countries doing well as the US economy remains stagnant.
Marginal tax rates exceeding 43% cannot finance runaway government spending, which has caused the national debt to skyrocket. The Obama administration continues to shackle entire sectors of the economy with regulation, including health care, finance and energy. The intervention impedes both personal freedom and national prosperity.
Hong Kong continues to dominate the list, followed by Singapore, Australia, Switzerland, New Zealand and Canada. These are the only countries to earn the index’s “economically free” designation.
The U.S. and the U.K, historically champions of free enterprise, have suffered the most pronounced declines. Both countries now fall in the “mostly free” category. The U.S ranked #12 while the U.K. was listed at #14.
Once again the economic ideology of President Obama, Jimmy Carter, F.D.R. and John Maynard Keynes is found wanting and destructive.