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Episode Two: Economic Freedom in America Today
For years the United States has been a world leader in economic freedom. But runaway government spending and burdensome regulations have caused a decline in economic freedom in the United States. If our economic freedom continues to fall, how will it affect our quality of life?
Why are living standards so-different for people around the world? On average, people who live in the countries on the right don’t live past 60 years old, but in the countries on the left, people live nearly 20 years longer. In countries on the right, the poorest individuals earn less than $3 a day, but in those on the left, the poor earn eight times as much.
The difference is economic freedom. These countries have the least economic freedom in the world. These, the most. The US is in this list, but how long will that last? The US’s gains in economic freedom made over 20 years, have been completely erased in just 9. Still dropping, America ranks lower than Canada for the first time ever.
Driving this decline is a growing government burden of overspending and unnecessary regulations. During the Bush years, government overspent so much it nearly doubled the US debt. Under President Obama, spending is on pace to double the debt again.
Excessive regulations have made things worse. The directory of federal regulations has increased to more than 81,000 pages. If you read 100 pages a day, every day, it would take you over two years to read. Every year, regulatory compliance costs US businesses 1.75 trillion dollars. That would be enough to hire 43 million workers, a quarter of the US work force. And it equals fifteen percent of the US private sector economy. Add in the cost of government spending, plus the cost of tax compliance, and the burden consumes two-thirds of the private economy. If you include government debt, and promises of future spending, total government commitments are over ten times the size of the private economy today.
This has consequences. As the growth of federal government spending has sped up, it’s caused the growth of the private economy to slow down. As a result, the US is going through the longest streak of high unemployment since the Great Depression.
This is America today. To ensure a better America tomorrow we have to stop our freefall in economic freedom.
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