Economic Freedom Falls Under President Obama

Discussion in 'Economy' started by PoliticalChic, Jan 21, 2010.

  1. PoliticalChic
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    PoliticalChic Diamond Member

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    "The United States' direction today is a dangerous one, even when compared to the country's state of affairs just one year ago, as revealed in the "2010 Index of Economic Freedom," a joint project from the Heritage Foundation and the Wall Street Journal. The Index analyzes just how economically "free" a country is, and this year America saw a steep and significant decline, enough to make it drop altogether from the "free" category. This is the first time in the 16 years since the index began publication that the United States dropped to "mostly free."

    What exactly is the Index? It's a comprehensive review of 179 countries around the world that considers economic freedom in ten separate areas, according to Heritage:

    Detailed analyses have found that citizens in countries with the highest scores on the Index enjoy much higher standards of living than their neighbors in countries that are less free.

    Freer countries, for example, have levels of per capita gross domestic product (GDP) that are more than 10 times higher than in countries that are mostly unfree or repressed.

    Higher levels of economic freedom also go hand-in-hand with broader indications of both economic and social well-being.

    Specifically, the Index records a wide disparity among the 20 largest economies in the world over the past year, with half continuing to increase economic freedom while the other half, including the United States and the United Kingdom, embraced policies that substantially diminished it, says Heritage:

    In particular, countries that undertook large stimulus measures or other government-directed attempts to spur growth failed to realize economic growth. "

    Morning Bell: Americans Call for Change As U.S. Becomes Less Economically Free | The Foundry: Conservative Policy News.
     
  2. Diuretic
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    Diuretic Permanently confused

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    Do they define or explain the term "economic freedom"?
     
  3. PoliticalChic
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    PoliticalChic Diamond Member

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    The Heritage Foundation has released the 2010 Index of Economic Freedom,which measures the various different types of fiscal and economic freedoms (such as business freedom, fiscal freedom, free trade and property rights) in 138 countries.
    Heritage Foundation release 2010 Index of Economic Freedom | United Liberty | Free Market - Individual Liberty - Limited Government

    What is economic freedom?
    Economic freedom is the fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume, and invest in any way they please, with that freedom both protected by the state and unconstrained by the state. In economically free societies, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself. (See the Methodology.)

    How do you measure economic freedom?
    We measure ten components of economic freedom, assigning a grade in each using a scale from 0 to 100, where 100 represents the maximum freedom. The ten component scores are then averaged to give an overall economic freedom score for each country. The ten components of economic freedom are:

    Business Freedom | Trade Freedom | Fiscal Freedom | Government Spending | Monetary Freedom | Investment Freedom | Financial Freedom | Property rights | Freedom from Corruption | Labor Freedom
    Index of Economic Freedom: Link Between Economic Opportunity and Prosperity | The Heritage Foundation
     
  4. Diuretic
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    Given the definitions they used I'm very surprised that Australia ranks 3.

    The narrative suggests that

    Notice how far down the United States is on the list. Unfortunately, our country’s score dropped from last year due to the government’s response to the 2008 economic crisis. As you can see below, scores dropped in seven out of 10 areas from the previous year.

    The response of our federal government to the GFC was to initiate a stimulus package even to the point of sending us money to spend to keep the economy going. Our banks didn't suffer, the word here is that that was because they are fairly tightly regulated. I'm pretty sure our income tax rates on individuals are higher than the US as well.

    I thought NZ would be well ahead of us due to their new government which is pretty much more liberal in economic terms than ours.

    Anyway, just a thought.
     
  5. PoliticalChic
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    PoliticalChic Diamond Member

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    You saw that the article suggests, no, states, that the use of 'stimulus' harms future economic activity.

    But many countries use stimulus, even in the face of events such as Japan's 'lost decade,' as opposed to the idea of letting organizations fail.

    Our President Harding used the opposite approach, and a serious recession was of short duration.

    Stimulus, as applied in the US, resulted in many restrictions and regulations. The gov actually told companies how and when to award bonuses: less economic freedom.

    High taxes are essentially the same.


    (I've borrowed "give it a read," and the kids give me a strange look.)
     
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