Heritage Foundation just released the 2015 Index of Economic Freedom, and this is the 20th anniversary of this report. Are we a free country any longer?
Launched in 1995, the Index evaluates countries in four broad policy areas that affect economic freedom: rule of law; limited government; regulatory efficiency; and open markets.
There are 10 specific categories: property rights, freedom from corruption, fiscal freedom, government spending, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and financial freedom. Scores in these categories are averaged to create an overall score.
This 21st edition of the Index analyzes economic policy developments in 186 countries and territories since the second half of 2013. Economies in six regions have been graded and ranked.
Based on an average score, each of 178 countries graded in the 2015 Index is classified as “free” (i.e., combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).
The United States continues to be only the 12th-freest economy, seemingly stuck in the ranks of the “mostly free,” the second-tier economic freedom category into which the U.S. dropped in 2010. However, the downward spiral in U.S. economic freedom over the previous seven years has come to a halt. For 4 years in a row of George W.’s 2nd term the U.S. was in the ranks of the “free”. Before those years the U.S. was in the ranks of “mostly free”.
Despite the continuing challenges that confront the world economy, the global average economic freedom score has improved over the past year by one-tenth of a point, reaching a record 60.4 (on a 0-to-100 scale) in the 2015 Index. Although the rate of advancement has slowed in comparison to last year’s near record 0.7-point increase, the world average has now reached a level a full point higher than that recorded in the aftermath of the financial crisis and recession, thus regaining all of the ground that had been lost.
Countries with higher levels of economic freedom continue to outperform others in reducing poverty, achieving greater prosperity, and ensuring broader progress in many dimensions of social and human development.
In the 2015 Index, economic freedom levels rose in all but two regions: North America, and South and Central America/Caribbean. Middle-East/North Africa, Europe, and Sub-Saharan Africa charted regional improvements, with The Philippines, Malaysia and Taiwan in particular helping the Asia-Pacific region post the biggest gain.
Asia-Pacific countries dominate both the top and the bottom of the 2015 Index rankings. Hong Kong, Singapore, New Zealand and Australia took four of the top five slots worldwide. North Korea remains least economically free in the world, and Uzbekistan, Burma, Kiribati, Timor-Leste and Turkmenistan all rank 160th or lower.
The methodology used in scoring assigns the same weight to each of the 10 categories, and it can be misleading if one were to assume that the categories associated with measuring limited government should have more weight than the others. Limited government is measured by fiscal freedom and government spending. For fiscal freedom think comprehensive tax reform, and for government spending think comprehensive entitlement reform. I imagine the congress critters, Representative Winking, Blinking, and Nod the same way that Ayn Rand described members of a company board.
Men whose careers depended on keeping their faces bland, their remarks inconclusive and their clothes immaculate.
If they ever let the mask slip they would say what Dr. Ferris said to Hank Reardon in Atlas Shrugged.
Did you really think we want those laws observed? We want them to be broken. You’d better get it straight that it’s not a bunch of boy scouts you’re up against… We’re after power and we mean it. . . There’s no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What’s there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced or objectively interpreted – and you create a nation of law-breakers – and then you cash in on guilt. Now that’s the system, Mr. Reardon, that’s the game, and once you understand it, you’ll be much easier to deal with.
For my wish to come true we need to elect more like Senator Mike Lee.
In 2014, 3,291 pages of new laws were passed by Congress – the branch of government with the constitutional authority to make law – and signed by the president. During this same period, unelected bureaucrats at dozens of federal departments and agencies issued 79,066 pages of new and updated regulations.
These rules – many that are are inefficient, ineffective, and excessive – continue to limit the ability of small businesses and workers to succeed, rig the system to benefit connected insiders, and hurt hardworking American families through higher costs and limited options in the marketplace. Yet, despite the very real negative effects on our economy, the American people are unable to hold the unelected bureaucrats who make these rules accountable.
Congress cedes far too much lawmaking authority to the executive branch. I look forward to turning this trend around in the 114th Congress to ensure that the ones making the laws are the ones who can be held accountable by the American people.
Visit www.lee.senate.gov to share your ideas for regulatory reform.
When one considers the labor participation numbers in the Labor Department statistics for unemployment, it makes one wonder how many have just decided to “go Galt”.