The Index of Economic Freedom published annually by researchers at the Heritage Foundation indicated on Monday that the degree of liberty offered by the American economy has continued to decline over the past year.
The conservative think tank granted the United States a rating of 70.6, constituting a decline of 1.5 points since last year and the nation’s lowest score in the history of the project. The “size and scope of government” was identified as one of the most salient factors weighing upon the American economy.
“The world and America are at a crossroads. Too many countries have renounced basic economic principles leaving communities to suffer the consequences,” Heritage Foundation President Kevin Roberts said in a press release. “They must choose either the narrow path of self-governance, human dignity, and ordered liberty, or the broad path of an economy run by the managerial elite with no room for dissent or responsibility. One path leads to prosperity, and the other leads to ruin.”
The United States retained high ratings in categories such as property rights, investment freedom, and business freedom. The nation’s lowest ranking comes in the domain of government spending since public debt is more than 128% of gross domestic product.
“The United States has one of the world’s most dynamic economies but has been undergoing policy challenges that undermine its long-term economic competitiveness,” the think tank said. “Since assuming office in 2021, President Joseph Biden has pursued and implemented policies that have expanded the size and scope of the federal government. Unchecked deficit spending and government debt have accelerated, and inflation undercuts economic livelihood.”
Biden has claimed that he presided over a “record decrease” in deficit spending over the past two years. Although he oversaw a decline in the deficit from $3.1 trillion in fiscal year 2020 and $2.8 trillion in fiscal year 2021 to $1.4 trillion in fiscal year 2022, according to data from the Office of Management and Budget, he has failed to mention that the record spending occurred as a result of legislation passed to mitigate fallout from the lockdown-induced recession. The deficit posted last year still significantly exceeds those witnessed in the years before the crisis.
Although the United States ranked twenty-fifth in both the 2022 and 2023 indices, the global average economic freedom score declined from 60.0 to 59.3 over the same period. Singapore, Switzerland, Ireland, and Taiwan are the world’s highest-ranked economies for economic liberty.
Heritage Foundation research fellow Anthony Kim commented that the environmental, social, and corporate governance movement, also known as ESG, has inhibited the economies of the United States and other nations. “Economic freedom correlates significantly with overall well-being, which includes such factors as health, education, the environment, innovation, societal progress, and democratic governance,” he said in the press release. “The true path to ensuring environmental, social, and governance improvements lies in focusing on policies that enhance economic freedom.”
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Critics of the ESG movement assert that the investment philosophy seeks outcomes in social causes, such as reducing carbon emissions and achieving racial diversity, in a manner that compromises or distracts from profit maximization. The movement is popular in Europe and elsewhere in the developed world.