Wednesday, September 19, 2012

What’s gone wrong with the American economy? Maybe it’s nothing more complicated than a sharp decline in economic freedom

When it comes to what’s gone wrong with the American economy, Barack Obama has a theory of the case.
Rather than boost economic growth, Obama has theorized, three decades of pro-market policies such as tax cuts and deregulation have done nothing more than increase income inequality on Main Street and financial instability on Wall Street. In the 2000s, those chickens finally came home to roost, culminating in the Great Recession.
Mitt Romney’s theory? I’m really not sure. But some new data from the Fraser Institute suggests a decline in economic freedom during the Bush and Obama administrations could be the problem.

– From 1981through 2000, the U.S. economy grew at an average annual rate of 3.4%, creating some 42 million jobs in the process. During that period, according to a ranking of economic freedom from the Fraser Institute, the U.S. consistently had one of the freest economies in the world, ranking 2nd or 3rd during that entire period.
– But from 2001 through 2010, the U.S economy grew at an average annual pace of just 1.6%, creating a mere 819,000 jobs. During this most recent period, according to the Fraser Institute, the United States’ freedom ranking steadily declined to 8th in 2005, 15th in 2009 and 19th in 2010. The U.S. is now nestled between Qatar and Kuwait:

Read more: http://www.aei-ideas.org/2012/09/whats-gone-wrong-with-the-american-economy-maybe-its-nothing-more-complicated-than-a-sharp-decline-in-economic-freedom/

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