The 2012 Index of Economic Freedom has just been released. This is my favorite publication from the Heritage Foundation, and second only to the Economic Freedom of the World Index as a measure of global public policy.
The news scores for 2012 are not pretty. We have bad news, we have worse news, and we have worst news.
Economic Freedom Declines in America
The bad news is that the score for the United States dropped from 77.8 to 76.3, which caused America to drop from 9th place to 10th place in the global rankings.
The worse news is that the U.S. dropped only one spot because other nations also adopted more statist policies. America would be in 12th place if Denmark and Bahrain simply maintained their positions from last year.
The worst news is that America’s decline is not just a one-year phenomenon. The chart shows how the U.S. has dropped from being a “free” nation to being a “mostly free” nation over a four-year period.
But it’s not just the past couple of years. The second chart, using data from the Economic Freedom of the World Index, shows that the United States has declined over the past 11 years thanks to Bush-Obama statism.
In other words, America is paying a real prices for bad government policy. As jurisdictions such as Hong Kong and Singapore continue to liberalize their economies and maintain high levels of economic freedom, jobs and investment will leave the United States in search of friendlier policy.
The only silver lining to this dark cloud is that other major economies – especially in Europe – are deteriorating at a faster rate. So America will benefit from flight capital in the short run even though our long-run prospects are equally dismal.
