Senator Jeff Sessions (R–AL) recently asked David Rosenberg, chief economist at a Canada-based global wealth management firm, at a Senate committee hearing:
Mr. Rosenberg, according to the 2014 Index of Economic Freedom, Canada is more economically free than the United States.… Would you say that [the progress Canada] has made is good, and if the United States were more economically free, would that help us increase gross domestic product?
Rosenberg replied, “The answer is yes.”
In fact, Canada has been riding high on greater economic freedom. According to the Index (published jointly by The Heritage Foundation and The Wall Street Journal), since 2010 Canada has surpassed the United States to become the freest economy in North America. Through moves such as downsizing government and cutting its corporate tax rate, Canada has restored economic dynamism and reduced unemployment, particularly since 2008. Cheers to Canada as the country enjoys one of the top three strongest job-creation records among advanced economies, with the creation of over 1 million net new jobs since the recession.
By contrast, the U.S. economy has suffered from a job-killing high corporate tax rate, an exploding regulatory burden, and a disturbing trend toward cronyism that has gravely distorted our free-market system. It’s no wonder America has fallen behind Canada, recording a loss of economic freedom each of the past seven years and the lowest labor force participation rate in 35 years.
As the 2014 Index (our 20th edition) attests unequivocally, economies achieving and sustaining higher levels of economic freedom measurably outperform others in achieving dynamic economic growth, long-term prosperity, and greater progress in many dimensions of human development.
During President Obama’s State of the Union address last week, he said that this year would be a “year of action” and promised to work—with or without Congress—to promote certain policy agendas.
Indeed, 2014 should be the year of action to reverse the startling decline of America’s economic freedom—with or without the President.