America fourth in economic freedom
January 8, 2008 | By Nathaniel Ward
Heritage's Index of Economic Freedom ranks countries in ten areas of economic freedom. The map above shows the global distribution of economic freedom, with darker colors indicating greater freedom. Click the map for a larger version.
The United States maintains the fourth-freest economy in the world, according to the brand-new 2007 Index of Economic Freedom, a co-production of The Heritage Foundation and The Wall Street Journal.
America performs well in areas like investment freedom, trade freedom, financial freedom, property rights, business freedom, and freedom from corruption. But there is certainly room for improvement when it comes to taxes and government spending, the Index finds:
America could do slightly better in fiscal freedom and freedom from government. Total government spending equals more than a third of GDP, although the percentage of total revenue received from state-owned enterprises and government ownership of property is low. Corporate and personal taxes are moderately high.
“Economic freedom is strongly related to good economic performance,” explains the Index, which was released this morning in Hong Kong by Tim Kane, director of Heritage’s Center for International Trade and Economics. “Former British colonies in Asia lead the world in economic freedom,” the report continues, while the data showed that a dozen of “the top 20 freest economies are European.”
At the bottom of the pack are impoverished countries that pursue counterproductive statist solutions to their economic problems. Robert Mugabe’s Zimbabwe ranks 154th of 157, Fidel Castro’s communist dictatorship in Cuba ranks 156th, while Kim Jong Il’s North Korea weighs in at dead last. Venezuela, whose dictator Hugo Chavez has turned a once-vibrant economy into a nosedive, ranks 144th, and his mullah allies in Iran place six spots worse.
So what does this all mean? It means that governments which limit economic freedom—socialist governments, for example—limit the quality of life of their citizens. Likewise, those governments that get out of the way and allow free enterprise to flourish will see substantially more prosperity.
Click here to read more about the new Index of Economic Freedom.
Just say no to new taxes
For more than three decades, The Heritage Foundation has made the case for lowering, simplifying and flattening taxes. Now, as both political parties scramble to take on the mantle of fiscal responsibility, it is important they remember that this can be accomplished only by reining in out-of-control spending, not raising taxes.
In a paper released today, Heritage budget experts Stuart Butler and Alison Fraser make this case plainly and unequivocally: “Any tax increase would be a real and unacceptable threat to America’s prosperity.”
They continue: “Rather than add new taxes, Congress should focus on curbing the projected growth of taxes and crafting a serious strategy to reform and constrain entitlements.”
Butler and Fraser make it abundantly clear what Congress must do:
- Reject tax rate increases and impose no new taxes;
- Reject any increase of the Social Security wage cap;
- Make the Bush tax cuts permanent; and
- Fix and then repeal the Alternative Minimum Tax (AMT).
“America has prospered in part because Americans enjoy low taxes and low spending,” they conclude. “But under current law, spending and taxes are both set to increase to record and unsustainable levels, threatening America’s prosperity and the freedom of American families to control the uses of their income. Congress's spending agenda should be to craft serious reforms to get entitlements under control. And the tax agenda for the new Congress should be the same as it would be for any Congress: no new taxes and decisive steps to reverse the increase in the overall tax burden that is already scheduled to occur.”
Is Congress undermining border security?
Congress on occasion tries to pull a fast one on the American people by sneaking in apparently innocuous provisions that have a large impact. Fortunately, Heritage’s experts keep a close eye on Congress for just this reason.
A new law, reports Heritage National Security expert James Carafano, would hamper the federal government’s efforts to add thousands of new Border Patrol agents. It would do this by “prohibit[ing] efforts to innovate and expand law enforcement training for the department and all of the other law enforcement programs supported by the Federal Law Enforcement Training Center.”
The FLETC, Carafano explains, is in charge of the Border Patrol’s Artesia, New Mexico training school. By blocking expansion and the devotion of new resources to the academy, Congress would stymie the Secure Fence Act, which calls for substantial increases in the number of Border Patrol agents.
“Adding thousands of new agents in a few years as mandated by Congress may not be feasible without expanding the training capacity of the Border Patrol Academy and the Federal Law Enforcement Training Center,” Carafano concludes. “Instead of hamstringing the DHS’s training capability, Congress should scrap Section 544 and consider giving the department additional means to train new agents.”
Click here to send this important news on border security to your friends.
Three reforms for the United Nations
Kofi Annan has finally been replaced as United Nations Secretary General by South Korea’s Ban Ki-moon. Now would be a perfect time to implement some long-overdue reforms, writes Jay Kingham Fellow Brett Schaefer of Heritage’s Margaret Thatcher Center for Freedom.
Though many around the world have come to depend on the United Nations, he explains, the organization has proved an inept failure on many occasions, and at times has been “even detrimental in discharging [its] duties.”
Schaefer outlines three priorities for the new leadership:
- “Replacing senior U.N. leadership with people committed to overhauling the organization.”
- “Reinvigorating the drive to improve the management and fundamental day-to-day operations of the U.N.”
- “Confronting the rampant ethical lapses of U.N. peacekeepers and adopting reforms to prevent their recurrence.”
In other news
- Heritage continues to make an impact where it counts. Sen. Chuck Grassley (R-IA) this morning cited the testimony of Heritage health care expert Ed Haislmaier on the Senate floor (watch the video in Windows Media format).
- According to census data, a majority of women are for the first time living without a husband. As of 2005, 51 percent of women live without a spouse; in 1950, the figure was 35 percent. This decline is alarming, especially given the important benefits marriage confers on individuals and society.
- Glenn “Instapundit” Reynolds looks at mandatory gun-ownership laws in various municipalities—and how such laws may advance the Founders’ vision and serve to deter crime.
- A graphical illustration of the problems caused by a minimum wage hike.
- By requiring cheerleaders to attend both men’s and women’s games, a new interpretation of Title IX has caused scheduling disruptions, changed the atmosphere at events and even caused some girls to drop off the squad altogether. Ain’t arbitrary government “equality” policy grand?
- News reports indicate that Cuban dictator Fidel Castro is suffering from a serious intestinal infection. The Cuban government dismissed the reports as “lies.”
- Rep. Dennis Kucinich (D-OH) plans to reintroduce regulations to mandate “fairness” in broadcasting, a radio industry magazine reports. The re-imposition of the “Fairness Doctrine’s” arcane rules, repealed by the Reagan administration, could have the effect of stifling political speech like talk radio. Via Captain’s Quarters.
Coming up at Heritage
To attend these or any other Heritage Foundation events, RSVP at Heritage’s events website. Or you can watch these events live online at Heritage.org. All times are Eastern.
- On Thursday, January 18 at noon, author Dinesh D’Souza will explain how the cultural left and its allies in Congress, the media, Hollywood, the nonprofit sector, and the universities are the primary cause of the volcano of anger toward America that is erupting from the Islamic world.
- On Friday, January 19 at noon, author Thomas Evans discusses his new book, The Education of Ronald Reagan: The General Electric Years and the Untold Story of His Conversion to Conservatism.
Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation.
