Sunday, December 18, 2016

Spreading the News on the State of Economic Freedom

The Fraser Institute has released its 12th edition of the Economic Freedom of North America index (EFNA), which ranks and compares the levels of economic freedom across North America and within the U.S., Canada, and Mexico by measuring taxation, regulation, labor market restrictions, and the size of government. The bad news for those of us in the “land of the free” is that the top jurisdiction and two of the top three are in Canada. The good news is that several states are applying the commonsense principles of economic freedom, enabling their citizens to deploy their talents, pursue their goals, and use their wealth free of unnecessary government restriction and regulation.
Ups and Downs
A little more bad news -- at least for Americans -- before we get to some more good news: on the 2010 EFNA index, there was only one Canadian province in the top 47 jurisdictions measured. Today, there are five Canadian provinces in the top 22. Since 2004, the average score for U.S. states on the EFNA measure has fallen from 8.26 to 7.70 (out of a possible 10). California’s score, for instance, has plummeted from 6.4 in 2000 to 5.9 today.
In other words, too many states are following D.C.’s lead by overspending, overtaxing, oversubsidizing, overregulating, and undercutting individual liberty. As a result, many U.S. states are falling behind their Canadian neighbors in economic freedom, just as the U.S. is falling behind its global neighbors. Indeed, this downward trend is reflected in the international rankings, where the U.S. has fallen from 2nd in the world in 2000 to 16th in the 2016 rankings. (By comparison, Canada’s economic freedom ranking has jumped from 14th in the late 1990s to fifth today.)

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