A New York Times article last July 22 noted some surprising statistics comparing recent economic growth in several Western Hemisphere countries. This news item reports that in both 2011 and 2012, Mexico’s economic growth outpaced the giants of the hemisphere – the United States, Canada and Brazil. The source for this information was the International Monetary Fund.
Another surprising fact revealed in the New York Times report was that over the past few years, more Americans have been added to the population of Mexico than Mexicans added to the U.S. population – according to government data in both countries. This is a historic milestone. Clearly, a country’s economic vitality creates new dynamics of migration. Mexico’s officials say that residency requests from foreigners grew by 10 percent in just a few months. Three-quarters of Mexico’s 1 million documented foreigners are Americans, ranging from executives to laborers.
While it is not news that America’s economic policies have resulted in widespread joblessness and declining family incomes, it is news that America’s economic growth now lags behind Mexico’s. This reverses a long-time trend of Mexico sending its citizens north for job opportunities in the United States.
Now comes another measurement of current economic freedom. The Index of Economic Freedom, an annual study conducted for the past 20 years, released its most recent comparisons showing America’s economic freedom steadily declining for the past seven years. The United States is no longer one of the top 10 economically free countries in the world. It has fallen to 12th place while overall world economic freedom has steadily risen.
What does the Economic Freedom Index measure? It measures, among other things, tax rates, property rights, size of government, regulatory burden and fiscal soundness. The Wall Street Journal and the Heritage Foundation compile this annual index and comparisons. Commenting on America’s falling rank on economic freedom, a Heritage Foundation spokesman said, “The 2014 Index of Economic Freedom should act as a wake-up call to U.S. policymakers and citizens alike. Freedom leads to prosperity. … As we fight for a just government, we must also fight for a government that lives within its means and does not spend the next generation’s money.”
This study found particularly large losses for the United States in property rights, control of government spending and freedom from corruption. The United States is the only country to have recorded a loss of economic freedom in each of the past seven years. What a turnaround for the country where a private economy and free market have been American hallmarks for 238 years, providing a ladder to prosperity for American workers. Successful free enterprise directly relates to economic liberty – liberty to pursue job opportunities and freedom to risk one’s own capital and sweat to create a better life for themselves and their families.
Economic freedom in a traditional sense emphasizes free markets, free trade and private property under free enterprise. The report from the 2014 Index of Economic Liberty notes that the president’s healthcare law “appears to be significantly hurting job creation and full-time employment.”
It is frustrating for Americans to hear White House politicians, and others who have been in charge of the nation’s economic policies for the past five years, rail against “income inequality” as though they had nothing to do with it and as though it is the result of someone else’s policies. The best antidote to income inequality is jobs and economic growth. So, Mexico’s economy is growing more robustly than ours, and the United States is declining in economic freedom – in stark contrast with a system that had historically provided more prosperity than any other system in the world. Isn’t it time to step back and consider returning to what has worked for more than two centuries in providing greater freedom and a more prosperous society than any other? Occupying a rank beneath Chile, a developing country seeking first-world status, is not the brand of liberty we need.
Runaway government spending, tax hikes and economy-crippling regulations are not the route to either liberty or financial stability. While it may take a daunting effort, Americans have the capacity now as they have always had in the past, to get beyond this hurdle and return to a more limited and stable government.