The Heritage Foundation released its 2011 Index of Economic Freedom, and the results were not good for America. The United States’ economic freedom level has fallen again this year, as eight other countries now have more economic freedom than the United States.
According to the Heritage study, the cause of our declining economic freedom is a direct result of our government spending. Our deficit in 2010 was actually higher as a percentage of Gross Domestic Product than the deficits of Greece or Spain. Even more alarming is that today, we spend only 4.9 percent of our GDP on national defense and 9.9 percent on entitlement programs such as welfare. Spending on entitlement programs “is set to consume 100 percent of tax revenue by 2052.” In essence, the United States is on a spending path leading away from economic freedom.
Why does that matter? Economic freedom is the foundation of all other freedoms. Heritage explains that in economically free societies, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself. Declining economic freedom hinders our economy and pushes us closer to a European style welfare state.