America Lags in Economic Freedom
Eight years of Obama will do that. The good news is we can improve.
Nancy Pelosi once pontificated that unemployment benefits “create jobs faster than almost any other initiative you can name.” This mind-numbing statement embodied the mindset of Barack Obama and his fellow Democrats over the last eight years. And it illustrates one of the challenges President Donald Trump faces.
Democrats and big-government Republicans can’t possibly believe that redistributing wealth and regulating market forces are the keys to economic freedom and prosperity. More likely, they know that doing so gives them the power to manipulate the very citizens they represent by making them dependent on costly government planning and social programs.
And so, as a result of Obama’s concerted efforts to gum up the works, politicians prospered, government grew bigger, and a stagnant American economy became ever more bogged down by overregulation and job-killing government mandates.
Clearly, this approach failed to create jobs, inspire innovation and grow the economy. Obama liked to talk about shovel-ready jobs, but those could be found only in the government sector, where employees enjoy salaries pre-paid by everyone else.
Despite plenty of statistics that revealed our economic stagnation — such as non-existent wage growth and an ever-shrinking workforce — Obama continued to paint a rosy picture, even creating the impression that the economy was humming along. But behind closed doors, he and his fellow Democrats put up roadblocks to funnel economic productivity into the government’s coffers.
In reality, Obama handed Trump a sputtering economy — one that, according to the 2017 Index of Economic Freedom published by the Heritage Foundation, now ranks 11th in the world. America is tied with Denmark, and just barely ahead of Sweden (no offense to our Nordic friends, but seriously?). Heritage’s website lists four “categories of economic freedom,” including “Rule of Law, Government Size, Regulatory Efficiency, and Open Markets.” Our nation’s 2017 ranking is its lowest ever.
Now, the current state of our economy isn’t due to Obama’s socialist tendencies alone, but to decades of damaging policies that created burdensome tax rates for corporations and individuals, implemented job-crushing regulations and mandates, led to unbalanced trade deals, contributed to the demise of our domestic industries and forced jobs overseas.
For decades, we have become accustomed to high taxation, government regulation and a house-of-cards monetary system propped up by the Federal Reserve. The result is that millions of Americans are unemployed or underemployed, dependent upon government for their sustenance, and unable to reach their full potential. Individuals are penalized by a tax system that redistributes wealth from those who produce and gives it to those who do not.
Small businesses are unable to keep their doors open, are forced to fire workers to comply with government-mandated health care, or cannot afford to hire new employees. Consequently, our economic engine is sluggish when it should be the envy of the world.
One of the stifling factors is tax policy — including a burdensome corporate tax rate of 35%, and a top individual income tax rate of 39.6%. Then add ObamaCare taxes. Rather than being reinvested in our economy, these monies are funneled into a bureaucratic political system that stifles American innovation and entrepreneurialism.
Unlike other nations on the Heritage Foundation list that are limited in their potential economic growth, the U.S. is in a unique position. America possesses the ability to grow its economy exponentially. We have the resources, the free political system, a relatively free market economy, a strong work ethic, and the creative energy to unleash another American century — if only we make the right choices.
Although the economic challenges we face seem daunting, the solutions are within our grasp.
In “The Road to Serfdom,” F. A. Hayek writes, “In a directed economy, where the authority watches over the ends pursued, it is certain that it would use its powers to assist some ends and to prevent the realization of others. Not our own view, but somebody else’s, of what we ought to like or dislike would determine what we should get.”
These words have never been truer, nor have we enjoyed such an extraordinary opportunity to reclaim the principles of capitalism that fueled America’s rise from an agrarian republic into an economic powerhouse. Such explosive growth is not fueled by government programs or regulations, but by their absence.
America is not suffering from a lack of resources, creativity, energy or willpower. Instead, self-serving politicians who control the levers of our economic engine inhibit us. And they alone will determine our fate for decades to come unless we reclaim our status as the world’s leader in economic freedom.