Freedom

U.S. Economic Freedom Keeps Slip-Sliding Away

|

Cash drawer
Public Domain

Last year, the Heritage Foundation's Index of Economic Freedom ranked the United States as the tenth freest economy in the world; in this year's just-released Index, it comes in at number 12. This sort of slide actually isn't a new phenomenon; Jesse Walker noted when the Index first dropped the U.S. out of the top ten, which was "partly a matter of other countries getting better, as opposed to the United States getting worse." Since then, though, the land of the brave and home of the free-ish has been sliding on its own merits, "with particularly large losses in property rights, freedom from corruption, and control of government spending." Even non-fans of the Heritage Foundation's number-crunching style should note that an even more dramatic decline in America's economic freedom is reported by Canada's Fraser Institute.

Overall score
Index of Economic Freedom

According to the 2014 entry for the United States at the Index of Economic Freedom:

The U.S. is the only country to have recorded a loss of economic freedom each of the past seven years. The overall U.S. score decline from 1995 to 2014 is 1.2 points, the fourth worst drop among advanced economies.

Substantial expansion in the size and scope of government, including through new and costly regulations in areas like finance and health care, has contributed significantly to the erosion of U.S. economic freedom. The growth of government has been accompanied by increasing cronyism that has undermined the rule of law and perceptions of fairness.

This is after a gradual rise in the country's economic freedom ranking relative to other countries during the first ten years of the index. While sniffer-outers of partisanship may wonder why government spending received a better (though sliding) score during George W. Bush's not-so-frugal years than during Barack Obama's continuation of those policies, Bill Clinton's tenure looks like one of moderate improvement.

Government Spending
Index of Economic Freedom

It's probably not a shocker that property rights have suffered a steady decline through the years—not just in the U.S. but around the world.

The Index of Economic Freedom doesn't stand alone in its assessment. 

The Fraser Institute's Economic Freedom of the World: 2013 Annual Report (PDF) agrees that the country is slip-sliding in the rankings.

Throughout most of period from 1980 to 2000, the United States ranked as the world's third-freest economy, behind Hong Kong and Singapore. As Exhibit 1.5 indicates, the chain-linked summary rating of the United States in 2000 was 8.65, second only to Hong Kong. By 2005, the US rating had slipped to 8.21 and its ranking fallen to 8th. The slide has continued. The United States placed 16th in 2010 and 19th in 2011. The 7.74 chain-linked rating of the United States in 2011 was nearly a full point less than the 2000 rating.

What accounts for the decline of economic freedom in the United States? While the US ratings and rankings have fallen in all five areas of the EFW index, the reductions have been largest in Legal System and Property Rights (Area 2), Freedom to Trade Internationally (Area 4), and Regulation (Area 5). The plunge in Area 2 has been huge. In 2000, the 9.23 rating of the United States was the ninth highest in the world. But by 2011, the area rating had slid to 6.93, placing the United States 38th worldwide. The 2.30-point reduction in the Area 2 rating of the United States was tied with Venezuela as the largest reduction among the countries rated.

That's an even more dramatic fall from grace than the Index indicates.

The U.S. now ranks behind Canada economic-freedom-wise in both the Fraser and Heritage assessments. In fact, U.S. federal policies now threaten the competitiveness, Fraser reports, of U.S. states that seek to make it easier to earn and keep money and property.

Reason TV covered the good news with the 2012 Index of Economic Freedom:

NEXT: A. Barton Hinkle Says Protecting Kids From Predators Doesn't Require Bigotry

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. The notion that our “freedom from corruption” has increased is so laughable that I have to wonder about the rest of this report.

    1. What’s odd is that they even mention increased perception of corruption in the text.

      The expansive use of government regulatory agencies to manage economic activity, particularly in the financial, health care, and energy sectors, has opened the door to increased perceptions of cronyism and corruption. Although property rights are guaranteed and the judiciary functions independently and predictably, protection of property rights has been uneven, raising charges of favoritism.

    2. The increase in corruption goes hand-in-hand with the increase in government power and discretion. Naturally.

      It’s no mystery why the U.S. has been an economic juggernaut. Why we’re turning our backs on the means to massive economic success is beyond me. Maybe it would be better if the statists didn’t think they could spend money they don’t have indefinitely. Then they’d be worried about the actual flow of revenues, which depend hugely on the health of the economy itself.

      1. Why we’re turning our backs on the means to massive economic success is beyond me

        Because the ruling class only care about their own immediate economic success. The rest of us can eat cake, because FYTW.

        1. Or because they believe being wealthy is like being tall: you just ARE that way, and will always be that way, and it will never change (outside of grievous wounds and so forth).

          They don’t believe that scarcity exists. Or, maybe more accurately, they believe that scarcity is like malaria. It exists, sure, but you can avoid it or cure it, and largely it’s someone else’s problem. They think of scarcity as an abstract theoretical concept, sort of like imaginary numbers, when, in reality, scarcity is the absolute, concrete, physical reality that a thing can’t be used twice, nor can it exist in multiple places. Daddy Warbucks may have a lot of money, but, eventually, if you tax it all away there won’t be any left to take.

          1. A free market economy here would make the pie so much bigger. We’d all benefit. Not to mention that at present, a wealthier America means a much more technologically advanced America, which could pay dividends we can’t even imagine.

            Instead, we strive to strangle this mysterious Golden Goose because we feel uncomfortable with freedom and its consequences.

            1. we strive to strangle this mysterious Golden Goose because we feel uncomfortable with freedom and its consequences.

              B-b-but… FAIRNESS!!!!11!! EQUALITY!!!!!!!!!!1! WHY DO YOU HATE POOR PEOPLE!!!!!11!!!!! /Tony

          2. they believe being wealthy is like being tall: you just ARE that way, and will always be that way, and it will never change

            Likewise they believe that poor people will always be poor, and that the rich people are only rich because they stole from the poor, and since everything is static in their view and the economy is a pie of fixed size, the only way to make people not poor is to take from the rich and give to the poor give the money to bureaucrats who then oversee worthless programs that end up helping no one but themselves.

  2. Progressives should love the news. After all, there is little they hate more than economic liberty since that’s the path to wealth inequality.

    1. nah, they’re too busy telling us how Obama has presided over all the hiring that’s going on.

  3. Not feeling very free at the moment.

    Tax time is coming. Hooray for us.

    1. Just saw my first full 2014 paycheck – Uncle Sam is taking a bigger bite this year because fuck you.

      1. Payroll taxes are an evil which should be purged from across the land.

        My allotment of fuckyouthat’swhy went up this year as well.

  4. America! Fuck yeah!

  5. More good news:

    (Reuters) – The U.S. government last month posted the largest budget surplus for any December on record, boosted by payments from government-controlled housing finance giants Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB).

    The mortgage-finance companies, which were propped up by $187.5 billion in taxpayer money after they were placed under government control in 2008, made hefty dividend payments last month in return for the support they received.

    Those payments helped the government take in $53 billion more in revenue in December than it paid out, the U.S. Treasury said on Monday. Analysts polled by Reuters had expected a surplus of only $44.0 billion.

    Reason won’t mention the much improved budget situation since 2008/09 but I will.

    1. So no need to ever raise the debt ceiling again! Fucking awesome news.

    2. Reason won’t mention the much improved budget situation since 2008/09 but I will.

      After turning an anomalous trillion dollar budget deficit into a baseline for 4 years, Obama has slashed it to a paltry 700 billion from it’s pre-2009 record high of 430 billion. Financial motherfuckin’ genius!

      1. The deficit was $1.3 trillion when Obama was sworn in 01/2009.

        http://www.politifact.com/trut…..istration/

        1. And didn’t drop appreciably until this year (2009 also includes quite a bit of spending appropriated under Bush that actually took place under Obama). I was being a bit generous with the baseline. The previous record high was 430-ish billion dollars. Today the deficit stands at 700 billion-ish dollars, the first time it’s been under 1 trillion since… 2009.

        2. What party controlled both houses of Congress from 2006 on?

          1. “When excluding World War II (therefore, 1946 to end of year 2009), the average increase in the federal debt was 4.8% under a Democratic President and 8.2% under a Republican President.”

            1. In just a few more months, the guy who you and Dipshit Dave up above love so darn much will have added more net publicly held debt than all the previous 43 presidents combined.

              Over 6.3 trillion dollars of net publicly held debt accumulated in just five and a half years in office! Choke on it motherfucker.

            2. What branch of government controls spending?

              1. Why, the president controls everything, doesn’t he? He’s more like an elected king, right?

                FWIW, I just love seeing partisan hacks trying to blame the other party for the increase in debt and arguing about which party’s worse. It’s like arguing over whether shit tastes better with or without little bits of undigested peanuts in it. Who the fuck cares? Either way you’re eating shit.

            3. And what exactly is your point?

              That since you are in favor of more spending, you’ll be voting Republican now?

              1. I’m in favor of spending what we need to spend to meet the needs and desires of the people, while taxing enough to afford it, and using fiscal and monetary policy to keep the economy stable, which involves incurring debt from time to time. So no I will not be voting for Republicans, who don’t understand how any of this works, who claim money is free when they are in power, proceed to spend it on disastrous oil wars, and then claim the debt they caused is the only problem in the world once they’re out of power.

                1. So no I will not be voting for Democrats, who don’t understand how any of this works, who claim money is free when they are in power, proceed to spend it on disastrous oil wars, and then claim the debt they caused is the only problem in the world once they’re out of power.

                  It works this way too, Tony.

                  Obama definitely wasn’t going on about how unpatriotic it was to have a huge national deficit when he was a senator.

                  1. Deficit falling at fastest rate since 1950s.

                    1. Obama has presided over more debt accumulation than the 43 presidents before him combined.

                    2. Deficit falling at fastest rate since 1950s.

                      Obama has presided over more debt accumulation than the 43 presidents before him combined.

                      All we have learned here is that regression is faster the further from the mean you start.

                    3. You do have to love how quickly the motherfucker tried to change the subject from the debt to the deficit when it got pointed out to him how much the debt has increased over the last five years. As if nobody would notice that.

                    4. Deficit falling at fastest rate since 1950s.

                      Yet is still higher than at any point in (pre-2008) history.

                2. Do you wipe the drool off your chin or do you just let it drip onto the floor?

                  1. That’s not drool FdA.

                    You’re welcome for the mental image.

    3. More good news

      Figures you’d think a post headlined “U.S. Economic Freedom Keeps Slip-Sliding Away” is good news.

  6. Is this where Tulpa comes to tell us to quit complaining or leave?

    1. Hey, those boots aren’t going to lick themselves.

    2. Chile is in the top 10, but all the people there pee in their own drinking water.

      /CytoTulpa

      1. Given the results of their recent elections, they may not be there long.

        1. It’s the curse prosperity. The better things are the more socialist you can “afford” to be.

          1. The better things are the more socialist you can “afford” to be.

            But you won’t be able to afford it for long.

            1. So there must be an equilibrium, right? Just Socialist enough to keep the idiots happy. Just prosperous enough to pay for it. Are we there yet?

              1. The idiots won’t be happy until we’ve gone full retard communist.

              2. The problem is, there is no “just socialist enough to keep the idiots happy”. We are always a few more socialist programs away from utopia so we must keep working for them… until we are not prosperous enough to pay for it.

                1. Yes, just try to imagine someone saying “You know, I’m entitled enough to the property of others. Really, I couldn’t take another handout in good conscience.”

                  That’s why there’s no “just socialist enough”. Because there’s always something else that somebody has that people want to seize for themselves.

              3. We were there about twenty years ago.

                Unfortunately the idiots in both parties, being progressives, kept on ratcheting the spending up since revenues kept increasing.

      2. Shut up you retard. Just because you can’t handle Tulpa-one of HandR’s worst dumbest commenters-doesn’t make him nearly as smart as me. Maybe you’d be less butthurt if you sucked less at thinking and arguing.

        Also: Chile elected a crass leftist with a crass leftist agenda. It is no longer ours.

        1. A crass leftist who was president only a few years ago and has no intention of turning her back on market led growth.

          I’ll take Chile’s socialists over America’s Republicans.

    3. He doesn’t come out much during the week. Though he does shit all over the place on the weekends.

      1. Bo’s taken up the slack

          1. Not to be outdone, Tulpa upped his stupid by claiming Fullerton was a case of jury nullification. That is solid, A-grade Tulpatard right there.

            1. I saw that. Another Tulpa classic.

  7. While sniffer-outers of partisanship may wonder why government spending received a better (though sliding) score during George W. Bush’s not-so-frugal years than during Barack Obama’s continuation of those policies…

    Could be because Obama took an anomalous trillion dollar deficit and made it the budget baseline going forward. In nominal dollars he’s added more to the national debt in 4 years than Bush did in 8. That Bush wins the tallest midget contest isn’t a partisan issue.

  8. I love this story – MA just raised a bunch of taxes, to spend on a State Climatologist.

    http://bostonherald.com/news_o…..matologist

    1. “Well, ah, we expect that the next several winnahs ah gahna be wicked fahckin’ cold, but it might get up tah the 70s in tha summahs, which is pretty fahckin’ haught if ya ask me.”

      1. It would be awesome if the Governor appointed Sully from South Boston to give that exact report.

  9. I blame obstructionist teathuglicans for blocking all that freedom-giving legislation and regulations.

    1. If only Congress did more, we would be free!

      1. Obama has his pen… and a phone!!! He’s ready to use the power of executive order to skip over that slow legislative arm of the government to get help to the people who need it. He’s a such a nice guy!

  10. Our “Labor Freedom” scored a 97.2? Was that only considering the Federal government or did they include state and local regulations as well? I mean do you have any idea how hard it is to open a new taco stand in many of our major cities? Or would they lump all would-be self-employed into the “business freedom” category?

  11. Just to be clear, they’re defining “freedom” as how much workers and the nonrich are screwed over, right?

    1. How can you hold these views when the modern “poor” live longer, happier and healthier lives than the middle class of just a few decades ago? If that’s being “screwed over” then we could all use a bit more screwing.

      Let go of the envy, Tony. It’s a terrible waste of time and energy.

      1. There’s still “rich people,” and since the economy is a static sized pie, that means that those EVUL RICH PEEPLE all got that way by stealing from the “poor.” Therefore those EVUL RICH PEEPLE need to have their money taken away because FAIRNESSS… EKWALITY!!!11!!!11!!!

      2. The poor aren’t living in pools of their own diarrhea, therefore it’s OK to completely ignore the fact that the wealth produced by their society goes almost entirely to the top couple percent.

        1. You sound like every fascist/communist of the last 100 years. It’s really boring, Tony.

        2. Envy is a gross and very unbecoming character flaw.

        3. Again, you assume “society” produces wealth, rather than individuals in that society.

    2. Proscribing people’s choices is totally not screwing them! Freedom is slavery, comrade!

  12. Just giving the plebes what they want, government run everything!

Please to post comments

Comments are closed.