In a related note to yesterday’s post on Haiti’s government and economic freedom, it looks like the United States has fallen in the rankings of the Heritage Foundation’s “Index of Economic Freedom.” Heritage notes the following:
For the first time ever, the U.S. has dropped out of the free category and fallen to mostly free in the 2010 Index of Economic Freedom. Of the world’s 20 largest economies, the U.S. has suffered the largest drop in economic freedom.
The U.S. is ranked 8th this year, behind countries like Hong Kong, Australia and even Canada. We used to be no. 1 in North America, but Canada has topped us in the latest index.
The U.S. saw a decline in freedom from last year for the following categories: business freedom, government spending, monetary freedom, investment freedom, financial freedom, property rights and labor freedom. The only categories where the level of freedom increased were trade freedom and freedom from corruption.
Economic freedom is the engine that drives economic growth and job growth. This decline does not bode well for the prospects of economic recovery — unless policies are changed. And nominally “freezing” some spending will not be enough, particularly given the current debt level and the grim budgetary and economic outlook.