Economy & Business

America’s Economy Is ‘Mostly’ Free? Washington Needs to Back Out of the Marketplace

(Orhan Çam/Dreamstime)

‘The land of the mostly free and the home of the brave.”

That sounds wrong, and it is. But “mostly free” is how the U.S. economy rates in the recently released 2016 Index of Economic Freedom. This is bad news for Americans in general, and especially unfortunate for our poorest, most vulnerable citizens.

A joint research product of the Heritage Foundation and the Wall Street Journal, the Index measures the economic freedom of nations based on ten criteria, including the rule of law, size of government, regulatory efficiency, and market openness. These factors affect how easily Americans from Nebraska to New York can climb ladders of opportunity, start businesses, and make a better life for their families. These are the things that really matter.

Nations such as Switzerland and Australia continue to rank among the ten freest economies in the world, while North Korea and Cuba remain on the bottom rungs — their citizens the victims of crippling economic repression. 

The good news is that the average score for the 189 nations analyzed rose again this year. In other words, economic freedom overall advanced globally for the fourth year running. The bad news: Economic freedom declined here in the United States.

Our 2016 score is only 75.4 out of a possible 100 — well below the 80 points required to earn a “mostly free” rating. Indeed, the new score ties our previous worst — set in 1998. Put another way, all U.S. advances in economic freedom logged in the last 18 years have now been wiped out. As Americans, we shouldn’t have to settle for anything short of excellence — that’s not who we are.

America is exceptional because we are free. We are unique in history because we haven’t stood in line to ask a king, a court, or a bureaucracy for our freedoms. We have invented and invested, collaborated, and created great products, businesses, and services without government micromanagement.

Sadly, our nation’s lackluster standings in the 2016 Index will surprise no one who tracks government involvement in the economy. The Index’s data points and graph lines reflect the American farmer’s exasperation with EPA permits, the restaurateur’s fights with OSHA, and the entrepreneurs’ dizzying dance with the IRS. Americans are tired of the red tape.

#share#For decades, Washington has presumed itself competent to manage every aspect of the private sector. The intentions may be noble; the outcomes are cost-prohibitive, clumsy, and counter-productive.

Since 2009 alone, the federal government has saddled American businesses with more than 180 major new regulations. The cost each year is estimated at $80 billion, although the exact fallout of missed opportunities could be greater. The combination of a byzantine tax code, predatory federal agencies like the EPA, the monetary manipulations of an unaccountable Federal Reserve, and an administration that loves to pick winners and losers (e.g., sending millions to shiny “green” Solyndras while shutting down coal-fired energy plants) plunges a lot of powerful, prying — and all too often fumbling — fingers into the economic pie.

For decades the federal government has — through bureaucratic and regulatory mission creep — attempted to hold simultaneous jobs as parent-, doctor-, teacher-, and soup-kitchen-manager-in-chief. Fifty years after Lyndon Johnson’s Great Society initiative, we are still spending over a trillion dollars each year on 80 different welfare programs. Yet poverty, broken families, unemployment, and homelessness persist. In perhaps the cruelest irony of all, the centralized and distant benevolence of federal agencies often subsidizes unhealthy behaviors and handcuffs smart, local problem-solvers.   

#related#More jobs, a lower cost of living, and easier entry into and operation in the marketplace will do more to help the vulnerable prosper than any attempts at federalized benevolence. And they will help middle-income Americans, too.

Washington needs to back out of the marketplace. That doesn’t mean either abandoning the truly needy or giving free rein to “crony capitalists.” But for the health and prosperity of our country, we must allow more Americans to keep what they earn, hire employees, and conduct business with less government interference.

We look forward to a Congress and an administration that will allow Americans to be truly, not mostly, free to pursue success, serve others, and make our country even greater.‎

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