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2006
Economic Freedom
The Key to Economic
Success
Distribution of Economic
Freedom
Economic Freedom & PC
Income
What is the correlation between freedom & wealth?
What happens to your economy
when you increase freedom?
Economic freedom
index of India—Note
the last 5 years!
Economic freedom index
of China. Notice the
slow but steady change
in the last 12 years.
Predict how their economy has performed in
the years of increasing economic freedom.
How are they doing now?
Study Economic Freedom in Lithuania:
Remember Lithuania was a Soviet State until 1991!
GDP
Growth
1991 to
2003
What is the
correlation between
increasing economic
freedom and GDP
Growth rate in
Lithuania?
So what does this index say
about the USA? (Tied 9th)
•Trade Policy2
•Fiscal Burden3.9
•Government Intervention2.0
•Monetary Policy1
•Foreign Investment2.0
•Banking and Finance1.0
•Wages and Prices2.0
•Property Rights1.0
•Regulation2.0
•Informal Market1.5
2006 data
•1 is best, 5 is
worst
•What areas are
best & worst in
the US?
Historically, the U.S. Constitution has provided strong protections for private
property and economic liberties. Since World War II, the United States has
generally taken a strong leadership position in expanding global trade through
lower tariff barriers. Subsequent moves to deregulate, cut tax rates, follow stable
monetary policy, and protect intellectual property rights have engendered strong
growth. Regrettably, some recent trends have raised questions about such
traditions. The U.S. Supreme Court's June 23, 2005, Kelo v. City of New London
ruling on eminent domain exposes many Americans' property to arbitrary seizure;
and while countries in Eastern Europe are adopting flat taxes, deregulating, and
privatizing, the U.S. may be drifting toward bigger government. The U.S. has
continued a leadership role in free trade with eight ratified free trade agreements,
another signed agreement, and ongoing negotiations with other countries.
However, continued use of the "anti-dumping" Byrd Amendment, combined with
anti-China rhetoric, indicates an ongoing protectionist mindset. Moreover,
legislated government spending under such laws as the massive farm subsidies
of 2002, the massive Medicare prescription entitlement of 2003, and the massive
transportation bill of 2005 has expanded without constraints, and Sarbanes–
Oxley and other regulatory laws have raised compliance costs. The United States
trade policy score is 0.5 point better this year, and its fiscal burden of government
score is 0.1 point better. As a result, the United States' overall score is 0.06 point
better this year.
Economic Freedom scores all
countries
Click on country for details
What is the criteria for the Economic
Freedom Index?
http://www.heritage.org/research/featur
es/index/countries.cfm