One of the things that I watch closely each year is the United States’s rating as to economic freedom. There are two main annually released studies – one by the Heritage Foundation and the Wall Street Journal and the other by the Fraser and Cato Institutes. Both studies have been showing the US falling. But while the Heritage/Wall Street Journal study has the U.S. at 10, the new Fraser/Cato study has it at 18. That is simply awful.
Michael Tanner of Cato reveals some of the reasons why the US has fallen:
Actually, the decline began under President George W. Bush. For 20 years the U.S. had consistently ranked as one of the world’s three freest economies, along with Hong Kong and Singapore. By the end of the Bush presidency, we were barely in the top ten. And, as with so many disastrous legacies of the Bush era, Barack Obama took a bad thing and made it worse.
During the past four years, the U.S. saw significant declines in nearly all categories of the economic-liberty index. Most significant — and this should come as no surprise to anyone paying attention — is that the size of government grew substantially, particularly when measured by size of government subsidies and transfers and by government consumption as a share of national consumption.
The United States has also seen a substantial increase in business regulations, labor-market restrictions, and barriers to trade. Our standing fell in all those categories, and we have undergone a long-term deterioration in ranking on property rights as well.
To anyone wondering why the U.S. is having such a hard time recovering from this recession, the 2012 report provides a pretty devastating diagnosis.
The serious downturn that began in 2008 has had an enormous effect on the U.S. It is not merely that it caused serious suffering but it has also made it possible for various regulations and spending to be enacted on the claim that it was necessary to address the economic downturn. Robert Higgs’s claim that emergencies are the health of the state has certainly turned out to be true of our current emergency.