For 15 years, The Wall Street Journal and The Heritage Foundation have measured nations' commitment to free-market capitalism with their "Index of Economic Freedom." On the 2009 list, the United States has lost ground because of increases in both tax revenue and government spending as a percentage of GDP. It might not seem like that big a deal -- we dropped only from fifth place to sixth on the list of 183 nations -- but it bears watching:
The positive correlation between economic freedom and national income is confirmed yet again by this year's data. The freest countries enjoy per capita incomes over 10 times higher than those in countries ranked as “repressed.” This year, for the first time, the Index also correlates economic freedom with important societal values like poverty reduction, human development, political freedom and environmental protection. The linkages are robust, with economically freer countries performing significantly better on every indicator of well-being.
This year's index has a special chapter on the role tax cuts -- especially cuts in corporate taxes -- have played in the economic growth in Eastern European countries and other countriess such as Ireland. "The citizens of those countries lived for decades with state-directed economic planning and regulation, which many now advocate for the U.S. and other advanced economies." Wonder if Mr. Obama will read this. Oh, wait. He's busy planning that trillion-dollar expansion of the government bailout.
