The U.S. has tumbled in a number of specific measures as well as in the overall ranking. On size of government, we now rank 78th. For all the talk about European socialism, we now have a bigger government than much of Europe. On regulation, we do better, but we’ve still fallen from second in the 2003 report to eighth today. And for all the political chest‐beating about how we are losing trade wars, the U.S. is hardly a bastion of free trade. We now rank 60th in the world, not all that far away from Donald Trump’s bête noire, Mexico, which comes in at 67th place. Even the soundness of the dollar has declined. In the 2005 report, we ranked first in terms of monetary soundness. Today, following years of rising debt and quantitative easing, we are 40th.
Perhaps most frightening of all, when the report was first issued in 1980, our legal system and respect for property rights were the best in the world. We stayed in the top ten through 2000. But today, we’ve fallen to 27th, putting us in the company of countries such as Rwanda and Portugal.
It is important to note that this report measures only economic freedom. The U.S. still does better on measures of political freedom and civil liberties. Some of the countries that outrank us on economic measures have serious issues when it comes to human rights. Still, even on these measures, the U.S. is slipping. According to last year’s Human Freedom Index, which includes both personal and economic liberties, the United States ranks 20th.
Unfortunately, neither of the two leading presidential candidates is likely to make things better.
Donald Trump gives rhetorical support to cutting regulation, but he has been far more specific about the new regulations he plans to impose, such as paid sick and parental leave or, depending on the day of the week, a higher minimum wage. He would cut taxes, but he would also increase spending and grow the size of government. His refusal to tackle entitlement reform would balloon the national debt and further threaten the soundness of the money supply. After all, he has said that he wants to borrow more while interest rates are low and that we can always repay the debt by printing more money. He has demonstrated little belief in our legal system or property rights. And, of course, one of the key planks of his campaign is a vow to restrict our freedom to trade with whom we want. As the Donald himself might say, “Not good.”
Meanwhile Hillary doesn’t even give lip service to reducing the size, cost, and intrusiveness of government. She would massively increase government spending, and the only reason that she wouldn’t borrow as much as Trump is that she would raise taxes. She has never met a regulation that she doesn’t like, and her anti‐trade stance betters Trump’s only because it’s less believable. Bad or worse? Flip a coin.
We should not get too excited over small year‐to‐year fluctuations in these rankings. But there is no doubt that we are seeing a broad long‐term trend that is leaving us both less free and poorer as a nation. Worse, neither Donald Trump nor Hillary Clinton is likely to reverse that trend. That’s a pretty sad legacy to leave to our children.