Libertarians should chuckle that competing U.S. studies were just released that show the global ranking of America on the conservative Heritage Foundation’s Economic Freedom Index has plunged to #11 and on the liberal Stanford Poverty and Inequality Index has plunged to #10.
It should not be surprising to Libertarians that the “conclusions” from the competing reports are the polar opposites. The free markets Heritage Foundation is funded by business contributions and the socialist Stanford ‘Center on Poverty and Inequality’ is funded by an Obama Administration grant through the “U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, awarded by the Substance Abuse Mental Health Service Administration.”
The Heritage Foundation’s 2016 Index of Economic Freedom released on Feb 1 documents that “millions of people around the world are emerging from poverty thanks to rising economic freedom. But in contrast, America’s economic freedom has been on a declining path for a decade” as a result of rapidly rising government spending, subsidies, and bailouts.
Heritage points out that when President Obama took office in early 2009, the U.S. had the 6th freest economy in the world. But after government spending has exploded to $29,867 per household, the national debt has risen to $125,000 for every tax-filing household in America, the government takeover of health care is raising prices and disrupting markets, bailouts and new government regulations have increased uncertainty and resulted in stifling investment and job creation.
The Index of Economic Freedom in fell 2015 by -.8 points to an all-time low of 75.4. Although the US showed a strong gain in the “Rule of Law,” the score was hammered on measures of regulatory efficiency and limited government. The Heritage IEF study warned that America could soon face a crisis regarding the funding of the public debt.
Having fallen out of the top ten for the first time in the twenty years Heritage has been calculating the Index of Economic Freedom report, the US has fallen behind the United Kingdom and just ahead of Denmark’s welfare state.
The Stanford Center on Poverty and Inequality also released their Poverty and Inequality Report 2016 report on Feb. 1. The report assessed how the U.S. stacks up against its peer countries across 9 key domains: labor markets; poverty; health, income, and wealth inequality; segregation; education; mobility; and the safety.
The Stanford University’s report showed the National Report Card on Poverty and Inequality found the US falling to #10 behind: 1. Finland 2. Norway 3. Australia 4. Canada 5. Germany 6. France 7. United Kingdom 8. Italy and 9. Spain.
The report commented that although “The U.S. has long been heralded as a land of opportunity -- a place where anyone can succeed regardless of the economic class they were born into,” America now employs fewer adults and has a stiff class system.
The report states: ‘The inter-generational earnings elasticity, which speaks to the payoff that accrues to being born into higher-earning families, is substantially larger in the U.S. than in many countries that are not routinely featured as the ‘land of opportunity’.
The key “Conclusions” of the Stanford report are that raising the US score would require addressing #1 - “extreme residential segregation”; #2 – “large barriers to economic inclusion”; #3 – “extreme health barriers”; #4 “low prime-age employment”; #5 – extreme income & wealth inequality”; #6 - substantial cross-national variation in poverty and inequality.”
The Stanford report concludes that America will continue to fail to address ‘Poverty and Inequality,’ because the US safety net providing “only half the financial help people need, compared to the leading countries.”