Do Americans Still Believe Freedom Leads to Prosperity?

The modern ideals of private property, free markets and low taxes found unprecedented success in America over the last two hundred years. Beginning with free trade between the states, low taxes and a nearly hereditary aversion to government meddling – America prospered. The United States, with less than 5 per cent of the world's population, created almost 1/3 of the world's wealth for every year over the last century. However, today the planets are realigning, where a markedly interventionist government repels entrepreneurship while the rest of the world is learning to attract it, says Barry Asmus, a senior economist with the National Center for Policy Analysis.

At home, a 35 per cent corporate tax rate, strong union laws and more than two trillion dollars worth of annual government regulation has compelled a significant amount of capital and labour to find another home.

Every year, the American tax code becomes more complicated and less competitive.

Americans tout free trade, but undermine that truth when the current administration refuses to sign a free trade agreement with Colombia.

The United States topped all of the leading indices of economic freedom, competitiveness and globalisation over the last century; but today, the Wall Street Journal's Index of Economic Freedom shows the United States has fallen from the top-tier in 1999 to being moderately competitive in 2010.

Not only are current American economic policies less attractive, but countries like China and India are becoming centres of gravity themselves. Indications of America's decline are a falling dollar, massive government debt, an uncertain tax future and a health care bill with at least three negative unintended consequences per page, says Asmus.

For more than 100 years, the United States has enjoyed a boom in productivity and living standards unparalleled in human history. The central actor in that rise has been the entrepreneur, supported by the pillars of limited government, free enterprise, free ideas and a free flow of capital. The rest of the world believes this, the question is, do we?

Source: Barry Asmus, Do Americans Still Believe Freedom Leads to Prosperity? The Hill, December 1, 2010.

For text: http://thehill.com/blogs/congress-blog/politics/131405-do-americans-still-believe-freedom-leads-to-prosperity

For more on Economic Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=17

First published by the National Center for Policy Analysis, United States

FMF Policy Bulletin/ 07 December 2010