Land of the Free?

I don’t know how brave we are as a nation, but as to free, we’re not as free as we think.

At least according to the latest 2016 ratings on economic freedom put out by the Heritage Institute, a right-leaning think tank, and the Wall St. Journal. These two have been putting out ratings since 1995, and though there are some inevitable critics, most economists I know feel that they are about as reliable as any such statistics can be.

And the United States does not rank Number One, as you might think since it has the top economy.  In fact, it is not even in the top ten.  According to these ratings, the U.S. ranks 11^th in economic freedom, behind Chile, Ireland, Estonia (!), and the U.K.  At the top, Hong Kong, Singapore, New Zealand, Switzerland, and Australia.

There are ten basic criteria the raters use, including property rights, corruption levels, business regulations, finance and investment regulations, and government size and spending.  You can see why the U.S. doesn’t rank very well, right there: we have an enormous menagerie of regulations, we have an immense bloated bureaucracy of government people, and we have spent so much on our government that our debt is by far the largest in the world.

Regulations.  Government regulations, whether passed with good intentions (worker safety, environmental protection) or not (corporate protections, Congressional pork), have come at immense costs, most of them hidden. Costs to the manufacturer or producer, costs to the consumer, costs to the state, county, city, school district, and neighborhood for compliance, and costs to Washington for the time and (often considerable) personnel it takes to enforce them, probably the largest number of the 2.6 million people in the executive branch.

And these regulations involve every aspect,  including the most intimate, of the average American’s life: toilets, mattresses, food, lightbulbs, showerheads, clothes, diapers, washing machines and dryers, refrigerators, bicycles, television sets, and of course cars.  There is no official tabulation of these costs—the government would prefer to keep them hidden and uncalculated—but a respected economist at the Competitive Enterprise Institute, Wayne Crews, estimated in 2015 that government regulations would cost the economy $1.882 trillion in that year in lost productivity and higher prices, a figure that is greater than the GDP of all but eleven countries in the world.

The  Code of Federal Regulations, an immense library of all the regulations ever passed, was 175,268 small-type pages in 2014 (117 times bigger than the Bible) and Obama’s administration has added about 3,500 a year, so we’re now over 180,000.  For every law that’s passed by Congress, the Executive promulgates about 16 new regulations—in 2014  it was 3,554 new regulations compared to 224 new laws.

Size.  As to government size,  there are 15 Federal departments (each of which has several sub-departments), 8 executive offices, and 456 agencies (2009 figure) from coast to coast, only about one-sixth of them in or around Washington, D.C.—plus more than 1,000 Federal advisory committees, boards, commissions, councils, conferences, panels, and task forces.  All this employs 4.2 million people, more than any government but China’s  (but that has four times as many people to oversee), in an ever-increasing bureaucracy:  the number of layers in a typical agency has more than doubled, from 7 to 18, since the 1960s, so that now there are such offices as the “Principal Associate Deputy Undersecretary.”  Really.

Debt.  Finally,  our overspending has put us so much in debt that any number of respectable economists and scholars believe the whole nation will be broke in a decade or so. The government spends more every year than it takes in—we’ve had deficits in 45 of the last 50 years—so inevitably the total federal debt stands at $19 trillion now and keeps going up, $6 billion of it owed to foreign entities.  The interest  on that debt alone is $229 billion, eating up a large portion of the annual budget.

I certainly wouldn’t rate a nation with that kind of government very high on the economic freedom scale.  It’s something of a surprise we’re only Number 11.

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