Congressional passage of three free-trade agreements yesterday marked a rare victory for economic freedom in America. But the United States has a long way to go before it regains its status as a leader in economic freedom, according to a new video from the Charles Koch Institute.
Government regulations and rapidly rising federal spending have curtailed economic freedom in the United States. The result is a poor economy with high unemployment.
The Koch Institute bases its findings on the latest Economic Freedom of the World Report. Heritage’s annual Index of Economic Freedom, published in conjunction with the Wall Street Journal, has shown a similar trend for the United States in recent years. The United States ranks ninth, behind Canada, Ireland and Denmark.
Under the Obama administration, the United States has lost ground compared to its global counterparts. Ambassador Terry Miller, director of Heritage’s Center for International Trade and Economics, highlighted the stark contrast between the United States and Germany to show how two government policies can impact economic freedom:
Seen in the context of the Index of Economic Freedom, the results are dramatic and instructive. Before the recession, the U.S. economy, with its significantly higher traditional levels of economic freedom, was performing better than Germany’s. Since the onset of the recession, Germany has increased its citizens’ economic freedom, while in the United States, economic freedom has been curtailed. German economic performance now outpaces that of the United States.
The Koch Institute video illustrates the U.S. decline. For example, it costs U.S. businesses $1.75 trillion to comply with government regulations. That’s enough money to employ 43 million people, more than 25 percent of the U.S. workforce.