Economic freedom in America: The decline, and what it means

“The U.S.’s gains in economic freedom made over 20 years have been completely erased in just nine.” Furthermore, our economic freedom is still dropping, to the point where we now rank below Canada. The result is slow growth in the private sector economy and persistent high unemployment.

This is perhaps the most important takeaway from a short new video from Economic Freedom Project, which is a project of the Charles Koch Institute.

What are the components or properties of economic freedom? These are the factors:

• The size of government based on expenditures and taxes.
• Whether property rights are protected under an impartial rule of law.
• Whether there is a sound national currency, so that peoples’ money keeps its value.
• Whether people are free to trade with others, both within and outside the country.
• The regulation of credit, labor, and business.

Economic freedom is associated with longer lifespans and a higher standard of living, says the video. Excessive government spending and unnecessary regulation are two primary causes for the decline in economic freedom.

A press release accompanying the video explains the harm government is causes when it destroys economic freedom: “The video illustrates how excessive government spending and regulations are eroding economic freedom in the United States, hampering the growth of the economy and leading to record-breaking unemployment. To make this relationship more tangible to viewers, the video translates current statistics into concrete effects that have a direct impact on viewers’ lives. For example, the video notes the fact that it costs U.S. businesses $1.75 trillion to comply with government regulations and that this money would be enough to hire 43 million workers — more than one-quarter of the U.S. work force.”

The video explains that faster growth in government spending causes slower growth in the private economy. This in turn has lead to the persistent high unemployment that we are experiencing today.

This is the second video that the Economic Freedom Project has produced. For coverage of the first, see Economic freedom leads to better lives for all, says video.

To view the video at the Economic Freedom Project site, click on Episode Two: Economic Freedom in America Today. Or, click on the YouTube video below.