U.S. losing ground in global competitiveness
A new report out today from The Heritage Foundation reports that the United States is losing ground to its major competitors in the global marketplace. The 2010 Index of Economic Freedom, co-published with The Wall Street Journal, reports that out of the top 20 world economies, the U.S. suffered the largest drop in overall economic freedom.
"Scores declined in seven of the 10 categories of economic freedom. Losses were particularly significant in the areas of financial freedom, monetary freedom and property rights. Driving it all were the federal government's interventionist responses to the financial and economic crises of the last two years, which have included politically influenced regulatory changes, protectionist trade restrictions, massive stimulus spending and bailouts ! of financial and automotive firms deemed "too big to fail." These policies have resulted in job losses, discouraged entrepreneurship and saddled American with unprecedented government deficits."
The U.S. was previously ranked at 6th most free and now occupies the 8th place. Canada now ranks higher and boasts the highest North American ranking. Hong Kong continues to lead the rankings, for the 16th consecutive year, followed by Singapore, Australia and New Zealand.
Why is economic freedom important? Because it leads to innovation, risk-taking, entrepreneurship and ultimately, a higher standard of living. This helps alleviate poverty and leads to higher levels of education. Not only that, but successful economies churn out product and profit and tax revenue, which is used to help pay for vital infrastructure such as roads, schools, police, a cleaner environment and social safety nets.
It's no coincidence that gro! ups like Washington Policy Center advocate for freer economies! and streamlined, accountable government. The smaller the tax and regulatory burden on our businesses and entrepreneurs, the more successful they will become. This results in a win-win for folks in the private and public sectors.