America’s economic freedom is in increasing jeopardy.
That was one of the key findings of the Heritage Foundation’s 2022 Index of Economic Freedom, released in February. The annual global benchmark report, which compares economic governance and the competitiveness of countries, underscored the urgent need for America to change its political course.
The latest index reported that the United States fell from 20th to 25th place in the global economic freedom rankings – its lowest result since the first index was published in 1995.
Since the deplorable publication of the 2022 Index six months ago, America’s economic freedom has been further undermined by the big government campaign engineered by the Biden administration and its far-left allies.
The erosion of economic freedom is felt by many Americans. Inflation hit a 40-year high of 9.1% in June, and the economy contracted in the first and second quarters of the year.
Despite America’s already weakened fiscal health, the Biden administration has raced to implement a socialist political agenda that has added trillions to the national debt, raised taxes through higher inflation, increased the regulatory burden and centralized more federal power over the economy.
Take the latest example: President Joe Biden’s cancellation of some student loan debt. Noting that the move would cost half a trillion dollars, the Commission on a Responsible Federal Budget pointed out that the federal government’s actions on student loans since the start of the COVID-19 pandemic have cost about $800 billion. Of that, about $750 billion is directly due to executive action and regulatory changes by the Biden administration.
Already saddled with a national debt of more than $30 trillion, America cannot afford to offer hundreds of billions more to wealthy people. It would only add to inflation.
As a recent Wall Street Journal op-ed summarized, Biden’s politically motivated decision to write off half a trillion dollars in student loan debt “is by far the worst national move of Biden’s presidency and fools Congress.” and of all the Americans who either paid off loans or didn’t go to college.”
Indeed, America’s economic freedom is under attack by massive government spending that drives the country and its citizens into debt, and the taxes that must ultimately pay for the government’s spending spree transfer freedom of choice from the individual in government.
From a broader perspective, the cost, size, and intrusion of government is a central issue of economic freedom.
Widening deficits and growing debt burdens, both of which are direct consequences of government fiscal mismanagement, have led to the erosion of the overall fiscal health of the United States, whether the spending spree in course has exacerbated. Deviations from sound fiscal positions often disrupt macroeconomic stability, induce economic uncertainty, and thereby undermine U.S. economic freedom and resilience.
The country’s competitive position is not threatened because the federal government is not spending enough. The problem is that government has become too big in terms of scale, scope and power over our daily lives.
As the Index of Economic Freedom and numerous other studies have pointed out, a nation’s level of economic freedom goes hand in hand with its competitiveness and the general standard of living of its citizens.
More than ever, economic freedom – which is guaranteed by respecting the principles of the rule of law, limited government, regulatory efficiency and open markets – is essential to creating opportunities for people to work. , produce, save and prosper while improving the situation of the nation. global capacity for better health, a cleaner environment and national security.
To that end, Americans must understand that economic freedom is more than a business environment in which entrepreneurship and prosperity can flourish.
With its far-reaching effects on various aspects of human development, economic freedom empowers ordinary people, unleashes powerful forces of choice and opportunity, nurtures other freedoms, and improves the overall quality of life.
In explaining why America needs policies that promote prosperity, Heritage Foundation President Kevin Roberts and Sen. Mike Lee, R-Utah, wrote a joint op-ed earlier this year in which they wrote:
The political current always runs towards statism. But as GK Chesterton said, “a dead thing can go with the stream, but only a living thing can go against it.” Since the founding of America – on the principles of market capitalism that the elites hated then as now – we have been the living thing in the global economy. For two centuries, we have defied the cronyism and timidity of insiders in business and politics and entrusted our economy to our people – and it has made all the difference.
As Roberts and Lee pointed out in this commentary, “economic freedom is not something Americans should apologize for, but to exploit, stimulate, and give free rein to – for our own good, and that of all others too”.
This is the year to act on that reminder to restore America’s economic freedom.
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