Economic Freedom: What Does It Really Mean To Us?

TownHall Chairman Doug Wilson has a good one for us today. In a nutshell, he tells us that without economic freedom, we will have no freedom at all. But how do we lose this “economic freedom?” Higher taxes means less freedom. More government spending means less freedom. More government regualtion means less freedom. If it seems like the government that has pledged to protect our freedom is the one entity that is destroying our freedom, then you have not misread anything I’ve written.

From Mr. Wilson’s column:

More than at any time in recent memory, troubled citizens want the government to address their most basic problems. Whether it’s healthcare, the economy or the mortgage crisis the common thought process seems as follows: “I have a problem. What is the government going to do about it?”

This is a dangerous, if slightly understandable impulse—and it is one that Washington does nothing to curb. Consider, for example, that Washington’s response to the current economic slowdown consists largely of tax rebates despite the fact that supply-side tax cuts would do more to stimulate the economy by incentivizing work and investment in a way that a check-in-the-mailbox never will. But a rebate, of course, reinforces the notion that government gives and takes as it pleases, and that it can and will cater to the needs of its increasingly dependent citizens.

What we need more than anything else from our government is for them to get out of our lives and out of our pockets.

The Heritage Foundation and the Wall Streel Journal have a joint venture known as the “Index of Economic Freedom.” I referenced this index regarding Great Britain in a previous blog entry here:

A Hidden Tax On New Cars, NY Times Lies About Veterans And Great Britain Is “Mostly Free”
84rules
January 17, 2008

Mr. Wilson looks at few categories the Index takes into account:

Investment

The United States scored 80 out of 100 in the Index’s category of investment freedom, tied with four other nations in second place. According to the Index, the U.S. received points because it does not require foreign investors to register with the federal government, nor does it restrict the purchase of real estate on a national level. The U.S. lost points, however, because of its restrictions on foreign investment in banking, mining, defense contracting, certain energy-related industries, fishing, shipping, communications and aviation. While the U.S. allows for relatively free investment, it should move to ease some of these restrictions in order to expand investment opportunities.

Spending

Last year, U.S. government expenditures equaled 36.6 percent of gross domestic product. Thus, the U.S. rates 59.81 in the Index’s rankings for size of government; that’s fully 35 points behind Hong Kong, the most economically free nation in the world. Despite the severity of the problem, excessive spending has long been a concern limited mostly to political junkies and economists. No more. In an increasingly global and competitive economy, the U.S. must reduce its spending in order to limit public debt and foster private enterprise.

Business Climate

The Index confirms what many enterprising individuals have long known: America is a great place to do business. Accordingly, the U.S. received a 91.7 rating for business freedom. These high scores result, in part, from the fact that business owners are largely free to launch, maintain and close businesses with impunity. Across the globe, it takes an average of 43 days to start a new business. By contrast, one needs an average of only six days to start a business in the U.S.

As things stand now, the United States is ranked #5 on the list of economically free nations. But as always, such rankings are precarious and can be upset with the slightest change in policy.

Read on:

[A]s Thomas Jefferson put it, “the price of freedom is eternal vigilance.”

One way we can remain vigilant in the protection of our economic freedom is to support the extension of the Bush tax cuts. Indeed, my friend Ed Feulner, president of the Heritage Foundation, has noted that if the Bush tax cuts are allowed to expire in 2010, the U.S. will almost certainly fall from its position among the five most economically free nations in the world.

Ultimately, true economic freedom stands in stark contrast to the populist instinct to encourage government meddling in the economy. In light of this, our duty this political season is clear: We must demand nothing less from our candidates than full support for true economic freedom for all Americans.

In a Capitalist society, freedom isn’t just about being able to take your family on vacation to Disney World every year. It’s about having the power to make autonomous decisions in your life. To choose which doctor you want to see, to choose which job offer you want to take, to choose where you want to live, to choose what car you want to buy, to choose what you want to eat, to choose how many children you want to have.

But all of those options come from having the economic power to make choices. Higher taxes, more government spending and more restrictive regulations reduce our economic freedom and unjustly limit our choices. We already know that a major economic recession is heading this way at full steam. How should we deal with it when it gets here?

Just something to think about as we head into the 2008 election year.

You can access the complete article on-line here:

No Freedom Without Economic Freedom
Doug Wilson
TownHall.com
January 28, 2008

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