America Less Free Than in 2008
January 15, 2009 | By Nathaniel Ward
The United States economy is less free than it was a year ago, according to the latest edition of the Index of Economic Freedom.
On Heritage's blog, The Foundry, Heritage expert and Index co-editor Terry Miller warns that America is in trouble. "The U.S. slipped one spot to sixth place this year because of increases in both tax revenue and government spending as a percentage of GDP."
"Hong Kong and Singapore are once again the freest economies in the world," he continues, "followed in the rankings by Australia, Ireland and New Zealand."
The Index, a joint project of The Heritage Foundation and The Wall Street Journal, ranks 183 countries on a set of empirical criteria and confirms the link between freedom and prosperity.
America's latest economic policies are likely to worsen its score in the next Index, Heritage President Ed Feulner says. "Some of the policies undertaken or planned by governments to respond to the worldwide recession are likely to threaten long-term economic freedom, and thus endanger future economic growth. Certainly if the U.S. continues on its present course, all things being equal, its economic freedom score will decline next year."
Miller explains the core findings of the new Index in Tuesday's Wall Street Journal:
The positive correlation between economic freedom and national income is confirmed yet again by this year's data. The freest countries enjoy per capita incomes over 10 times higher than those in countries ranked as "repressed." This year, for the first time, the Index also correlates economic freedom with important societal values like poverty reduction, human development, political freedom and environmental protection. The linkages are robust, with economically freer countries performing significantly better on every indicator of well-being.
The 2009 Index has several key improvements, including a significant expansion of country coverage, new regional coverage and a fine-tuned labor freedom component.
This is the 15th edition of the Index, which is meant "to advance individual freedom, civil society, and prosperity around the world."
—David Talbot
Other Heritage work of note
- During this week's hearings to confirm Susan Rice, President-elect Barack Obama's nominee for Ambassador to the U.N., Sens. Jim DeMint and John Barrasso asked questions based on a Heritage Foundation analysis. Sen. DeMint, for example, questioned Rice regarding the threat to American sovereignty posed by the United Nations and the idea of "global governance." Heritage experts distributed this analysis directly to the Senators' offices in advance of the hearings.
- Heritage President Ed Feulner writes in the Indianapolis Star that government is not the solution to America's economic problems. "The Bush administration has already spent hundreds of billions of dollars 'doing something' in its final months," Feulner points out, and "now the incoming Obama administration wants to spend hundreds of billions more."
"But this is no time to throw good (borrowed) money after bad. If all this spending was going to get the economy growing, it would be working. Yet nobody expects things to improve soon. There's a lesson there, if we care to learn it. In times of uncertainty, it's natural that people will look to government for answers. Yet the long-term solutions to our current economic problems don't lie in more government spending, controls or regulations." - "Don't overlook President Bush's successes on foreign policy and security" writes senior fellow Peter Brookes in the Orange County Register. In the interest of giving credit where credit is due, Brookes reminds Americans that some of Bush's endeavors worked. "The fact is," he writes, "international relations is a tough business – and will continue to be. Countries pursue their national interests – often at others' expense, including ours. But the Bush administration has made real progress in advancing our interests during its tenure, especially in preventing another terror attack here at home – no small feat."
In other news
- Barack Obama will be sworn in as President on Tuesday before a crowd anticipated to be more than a million strong.
- A small scandal erupted this week when it was revealed that President-elect Obama's pick to run the Treasury Department forgot to pay $34,000 in self-employment taxes for work that he did for the International Monetary Fund from 2001 to 2004.
- Rep. Henry Waxman (D-Calif.) has said he intends to pass climate-change legislation out of his committee by Memorial Day. Lawmakers should keep in mind that programs intended to curtail economic output will only exacerbate the downturn.
- Citigroup is breaking itself up in an attempt to ensure its survival. The group is separating higher risk US consumer finance and securities businesses from its global commercial banking operations.
- Osama Bin Laden has issued a direct challenge to President-elect Obama, asking whether America "is capable to keep fighting us for more years."
- Ninety-four percent of the Israeli public supports the military action in Gaza, Tel Aviv report says.
Coming up at Heritage
To attend these or any other events at Heritage please RSVP at Heritage's website. Or you can view these events live online. All times are Eastern.
- On Tuesday, January 27 at 10:00 a.m., a panel of experts will discuss U.S. foreign policy in the Caucasus region, particularly as it relates to the Russian-Ukrainian gas war.
Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation. David Talbot contributed to this report.
