Economic Freedom is Declining in the United States
According to the Fraser Institute’s Economic Freedom of the World 2022 report that was published on September 8, 2022, the United States is now ranked as the 7th freest economy in the world.
While this is a respectable ranking, it represents a notable decrease in economic freedom since the era that Jimmy Carter occupied the presidency.
Per Phil Magness and James Harrigan of the American Institute for Economic Research, this index mainly covered 2020, the year governments worldwide imposed draconian lockdowns and social distancing measures.
The Fraser Institute’s Economic Freedom of the World 2022 report was released this morning.
According to the AIER writers’ analysis, the global average economic freedom rating dropped .14 points in 2020.
Generally speaking, the Economic Freedom of the World measures five categories — size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation — in 165 jurisdictions.
In terms of the most economically free nations, the US trails behind countries such as Hong Kong, Singapore, Switzerland, New Zealand, Denmark, and Australia. Although the US is still in the top 10 freest nations economically speaking, it has been trending downward in the last 40 years. In the 1980s and 1990s, the US hovered around second place in terms of economic freedom. In 2000, it was in third place. In 2010 and 2015, the US found itself in fifth and sixth place, respectively. By 2020, the US fell down to seventh place.
Things get bleaker when looking at the US’s economic freedom rating. Over time, the US’s cumulative economic freedom rating has worsened considerably. Currently, the US’s cumulative economic freedom rating is 7.97, which is significantly lower than its 1980 rating of 8.34.
The US fell in rankings “across all of the five indexed categories from 2019 to 2020” per the AIER report.
The most significant rating changes took place in the size of government and regulatory categories. The US plummeted from 7.32 to 6.79, and 8.68 to 8.11, respectively.
These figures represent growing levels of government intervention that the US has embraced over the past century. This increase in government size accelerated during the Wuhan virus pandemic, when the federal and state governments took advantage of the pandemic to expand their powers.