Where does the United States stack up against global competitors when it comes to economic freedom? It would be easy to assume that a nation built on the principles of personal liberty and free enterprise would be at or near the top — and for many years it was.
But according to the Economic Freedom Index recently released by the Heritage Foundation and the Wall Street Journal, the United States doesn’t even crack the top 10. America falls behind 11 other countries in key measures that include size of government, openness of markets, regulatory efficiency and rule of law.
The conclusions of such studies depend heavily on the factors being evaluated and the quality of data being used; regardless, the decline in our ranking in this study is worth paying attention to. The findings suggest that Americans have less control over their property, assets and some personal decisions like health-care coverage, and businesses have less freedom to invest, hire and grow.
One of the biggest threats to our economic freedom is a federal government that is ballooning in size and scope. Much of this expansion has occurred through regulations, which are now being churned out at a rate of 4,000 a year. All these regulations have a chilling effect on business, cooling hiring, investment and expansion. We need to fight against overregulation and reform the system to be more efficient.
Out-of-control government spending and growing debt are also undermining our economic freedom. The fundamental drivers of our deficits are unsustainable entitlements. We need to modernize and reform them; otherwise, we’ll continue to borrow against our future, putting opportunity and prosperity at risk for generations of Americans.
What should concern us most is not the rank but the downward trend. The United States is the only country measured whose ranking has declined seven years running. We’ve got to turn things around.
The good news is that we have ample opportunity to do it. We are making great strides in trade by building market-opening relationships with key partners around the world. We have a natural abundance of energy that is poised to make us an energy superpower and drive tremendous growth and jobs at home. We have opportunities to reform our broken immigration system and improve education, which would help make the U.S. workforce more flexible, skilled and competitive.
Anyone who’s ever bet against the United States has lost. If we solve our problems and seize our opportunities — and we can — we will ensure that our nation remains the best place in the world to live, work and do business.
— Tom Donohue is president and CEO of the U.S. Chamber of Commerce. The opinions expressed are his own.