Every year, the Heritage Foundation’s “Index of Economic Freedom” ranks countries according to their friendliness toward free market principles. Even as most nations maintain their economic freedom, the United States is falling behind.
According to the conservative think tank, most global economies have remained “moderately free” since last year’s report. At the same time, the 2021 index shows that the United States recorded “its worst score and ranking ever, a result of out-of-control spending and a loss of confidence by Americans in the even-handed rule of law.”
With a score of 74.8, the United States earned the 20th slot among the 178 countries that Heritage considered. The score assigned to the United States decreased by 1.8 points from 2020, causing it to slide from 17th place. Currently, the United States trails Canada and Chile as the third highest-ranked nation in the Americas.
“The major obstacles to greater economic freedom in the United States continue to be excessive government spending, unsustainable levels of debt, and intrusive regulation of the health care and financial sectors,” reads the United States’ profile.
The United States carries relatively high rankings for categories such as business freedom, property rights, and labor freedom. However, the United States’ ranking for fiscal health significantly lags global averages.
The average world fiscal health score is 74.2. The United States has a score of 34.9 — a drop of 19.4 points in a single year.
President Trump and President Biden both passed omnibus stimulus packages to address the economic fallout from COVID-19. The Trump administration’s CARES Act spent $2.3 trillion, while the Biden administration’s American Rescue Plan spent $1.9 trillion.
Even as the United States carries a national debt of $28.4 trillion and observes rising inflation, President Biden submitted a $6 trillion federal budget to Congress — a proposal that includes his American Jobs Plan and American Families Plan.
Although most of the world retained its “all-time high” support of free markets, Heritage remains concerned that governments’ financial responses to COVID-19 could pose risk to sustained economic freedom.
“Regrettably, some of the policy measures undertaken or planned by governments around the world in response to the global health crisis run the risk of undermining economic freedom and, thus, long-term economic growth and prosperity,” the Index of Economic Freedom editorial team explained in a press release from Heritage. “Policymakers cannot simply spend their way back to prosperity after the toll that public health responses have taken on local economies. For a meaningful economic recovery, economic freedom must not be curtailed by extended government emergency powers.”
Among the most improved countries in the index were Mongolia, Benin, Eritrea, Sierra Leone, Bahrain, Saudi Arabia, Solomon Islands, Barbados, and the Republic of Congo. Notably, Heritage refrained from ranking Hong Kong and Macau due to “Beijing’s growing control over the cities’ economies.”
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Source: Dailywire
