On Friday, Investor’s Business Daily posted an editorial about The Heritage Foundation’s 25th annual “Index of Economic Freedom.”
The editorial reports:
In just one year, the U.S. climbed six places to 12th worldwide on the Heritage Foundation’s 25th annual “Index of Economic Freedom.” The U.S. index score of 76.8 is the highest since 2011, the report says.
Heritage bases its annual rankings on a dozen different measures of economic freedom, such as tax burden, protection of property rights, tax burden trade policies, labor laws, judicial effectiveness.
…In fact, during Obama’s tenure, the U.S. plunged from 6th place down to 18th on the Heritage freedom rank, in the wake of tax hikes and massive new financial, insurance and environmental regulations.
The editorial explains the importance of these ratings:
Why do these rankings matter? As Heritage explains, there’s a clear correlation between economic freedom and prosperity. The freer an economy is, the more prosperous its people.
Heritage finds that in countries consistently rated “free” or “mostly free,” average incomes are twice that of all other countries, and five times that of “repressed” economies.
The most striking example of the connection between freedom and prosperity is Venezuela. One of the wealthiest countries in South America before socialist dictator Hugo Chávez took control, Venezuela is now racked with hyperinflation, starvation, and political chaos.
But you can see the same impact in the U.S. as well.
The editorial concludes:
And the benefits of this growth are widespread. The unemployment rate was just 3.9% at the end of the year. The job market is so vibrant right now that it’s pulling people off the sidelines to look for work. In fact, the number of people who aren’t in the labor force actually declined last year. That hasn’t happened since 1996 — which was in the middle of the Clinton boom. Wage growth is accelerating, and median household incomes are at record highs.
The freedom index is a powerful reminder that while redistributionist policies — like those currently in favor among Democrats — might be emotionally satisfying, they won’t grow the economy or boost prosperity.
It will be interesting where our rating is next year in view of the fact that the Democrats now control the House of Representatives.