The annual global economic freedom index measures the economies of 184 nations around the world by looking at their current situation and policies during the measuring time. This measurement took place between July 1, 2021, to June 30, 2022. Once everything was measured it was released on March 1st that the U.S. ranks 25th on the list. This is a drop of 5 spots from the previous year and the lowest the country has been in twenty years. In terms of the U.S. overall economic freedom score, the one that put them at 25th, it is actually the lowest it has ever been since the start of the index at 70.6.
The main cause of this drop to 25th was due to what was "mounting deficit and debt burdens" according to the index itself. We can see this activity in our economy as interest is currently rising at record rates and many are still experiencing the financial negative effects of the pandemic even still today. These index numbers will most likely continue to drop as it is estimated that the U.S. will have around 19 trillion dollars in added debt over the next 10 years.
The overall average score of the index has decreased this year as well to 59.3 compared to the 60.0 it was last year. This score is the lowest average the index has ever had following the same trend as the U.S. which I'm sure has had a major part in this decrease. Singapore is currently first on the index being known as the current most economically free country in the world with Switzerland in second.
3 comments:
I always find these lists interesting. When you think of the US, you think of the market economy and through that, the US should be high on the economic freedom list. Some of the social market economies we spoke about are higher on the list than us, which shouldn't be the case if the US was a true market economy. The government has been spending an exuberant amount, and it doesn't seem to be slowing down anytime soon. Of course, most of this spending is due to COVID, but we can't keep blaming economic issues on COVID. We must look forward to the future and see how we can climb this list to where we should be, the most economically free country in the world.
The pandemic more specifically, the government response (multiple stimulus checks and increased unemployment benefits) to it is definitely a contributing factor to this decrease in US ranking on economic freedom. I wonder if the US will continue to decline in ranking in the following years?
I think that this is a really interesting topic. I wonder if the current debate on student loan forgiveness in the United States could help raise the U.S. in this ranking? Since one of the main causes of this drop was due to "debt burdens", if student loan forgiveness passes, this might provide a great er economic freedom for United States citizens, and will also increase our national productivity, because more people would be able to afford to obtain a higher education.
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