The United States has dropped out of the top 10 most economically free countries, even as world economic freedom continues to reach record levels, according to a new report.
The Heritage Foundation
and The Wall Street Journal, say the problem lies in the "shackles" placed on the U.S. economy by the Obama administration's stringent rules.
The Heritage Index has, for the past 20 years, measured nations' commitment to free enterprise by evaluating categories such as fiscal soundness, government size, and property rights, writes Terry Miller, one of the report's authors, in a WSJ opinion piece.
The United States has been declining on the list for the past seven years, Miller writes, as other countries continued to make strides. It now places 12th on the list of 178 nations, one place ahead of Bahrain, but behind Mauritius, Ireland and Estonia.
The United States is losing ground, Miller said, because its tax rates, exceeding 43 percent, "cannot finance runaway government spending, which has caused the national debt to skyrocket. The Obama administration continues to shackle entire sectors of the economy with regulation, including health care, finance and energy. The intervention impedes both personal freedom and national prosperity."
Other countries are leaping ahead, with governments in 114 countries taking steps to enhance their economic freedom.
"Botswana, for example, has made gains through low tax rates and political stability," said Miller. "Those losing freedom, on the other hand, risk economic stagnation, high unemployment and deteriorating social conditions."
Miller said 43 countries, from every part of the world, "have now reached their highest economic freedom ranking in the index's history."
Hong Kong remains at the top of the list, followed by Singapore, Australia, Switzerland, New Zealand, and Canada, earning the index's "economically free" designation.
Some European countries are also reaching new heights when it comes to economic freedom, including Germany, Sweden, Georgia, and Poland, but economic policies in other countries, such as Greece, Italy, France, Cyprus, and the United Kingdom marked lower scores.
"The U.S. and the U.K., historically champions of free enterprise, have suffered the most pronounced declines," said Miller. "Both countries now fall in the "mostly free" category." The U.K. places 14th on the list.
The increasing freedom elsewhere makes it "inexcusable" that the United States is pursuing policies that are keeping it from growing and encouraging other countries to take the same course, said Miller.
The global economy is still expanding, said Miller, growing by nearly 70 percent over the last two decades to $54 trillion in 2012, and millions of people are escaping from poverty.
"But it is an appalling, avoidable human tragedy how many of the world's peoples remain unfree—and poor," said Miller, the director for the Center for International Trade and Economics and the Mark A. Kolokotrones Fellow in Economic Freedom.
The least-free country on the list is North Korea, followed by Cuba, Zimbabwe and Venezuela.
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