So what is needed to keep the economy humming? Maybe for American legislators and our executive branch, we should be asking how the United States slipped in the Index of Economic Freedom, recently released. Part of this is that many nations have improved their own economic performances and as one pundit observed, “The U.S. drop in ranking is explained in part by a slightly lower score, but mostly by the good performance among its competitors. The lesson? Stand still on the highway to economic liberty and the world will soon start to pass you by.”
Areas that the United States can improve is reducing our government spending as percentage of the overall economy and reduce high corporate tax rates. Making the Bush’s tax cuts permanent is one way to maintain economic freedom and tax reforms need to emphasize lower marginal tax rates.
CNBC economist Larry Kudlow has noted that maybe what Europe needs is a little “cowboy capitalism.” In Central Europe, the move is toward lower tax rates. Many in the EU bureaucracy are trying to derail this by harmonize the higher tax rates of France and many Western Europe economies. So there is a major battle on the European continent about the how much economic freedom that Europeans entrepreneurs will have. Spreading economic freedom beyond our borders will also enhanced the American economy and over the past year, more countries have liberalize their economies but certainly more can be done. What the last year proves is that Freedom works. And more economic freedom works better than less.
Article comments
1 - Mike Kole
Here! here! on the call for lower governmental spending.
I was pleased to see you slip in the item about the business freedom index, where the United States slipped from the Top Ten in terms of relative freedom from regulation. This is the first time in the history of the nation that the US is not in the Top Ten most free business climates.
Whenever I hear American employment rates decried, I think back to Spain and Andalucia, where my son lives and where I will visit again in two weeks. There, the locals are celebrating the lowest unemployment rates since Franco was dictator- a mere 18%! As recently as 1995, the rate was upwards of 35%.
Thanks for your post, and for listing a book by Sowell. It is appreciated.