During his State of the Union address, President Obama laid out lots of claims, plans, and promises. No matter how much he tries to repackage his rhetoric, however, it remains clear that the state of our union’s economic freedom has become frail due to his misguided policies.
According to the 20th anniversary edition of the Index of Economic Freedom, which was released in Hong Kong and Washington, D.C., earlier this month, the U.S. is the only country to have recorded a loss of economic freedom each of the past seven years. As a result, our economic dynamism and innovative capacity have been severely undermined, not least by the following:
- The U.S. has the highest corporate tax rate in the developed world. This has driven new jobs to other, more competitive nations and has meant fewer jobs and lower wages for all Americans.
- The overall cost of meeting regulatory requirements has increased by over $60 billion since 2009, with more than 130 new regulations in place. In terms of ease of starting a new business, the U.S. is ranked 20th, trailing countries such as Canada, Georgia, Rwanda, Lithuania, and Malaysia.
- The U.S. ranks 137th out of 178 economies in control of government spending as a percentage of gross domestic product (GDP). By world standards, it is near the bottom in that category. General government spending is close to 40 percent of GDP.
No wonder that the labor force participation rate has dropped to its lowest point in 35 years. Worse, vibrant entrepreneurial growth has been stymied by greater policy uncertainty and mounting debt. And a disturbing trend toward cronyism has gravely eroded the rule of law and distorted our free-market system.
Restoring economic freedom is indispensable to revitalizing and brightening America’s future. Now is the time to reaffirm the principles of limited government, free enterprise, and rule of law so that we can reconstitute an America where freedom, opportunity, and prosperity flourish.