The Fiscal Cliff Deal and Shrinking American Freedom: Hurting America’s Poorest Citizens

The fiscal cliff deal in America involves higher taxes, and virtually no spending cuts. On January 1, Americans were hit with a $1 trillion Obamacare tax hike. And, the tax penalty under Obamacare will hit nearly six million uninsured Americans.

In related news, the scholarly and widely respected 2012 Index of Economic Freedom verifies that America is marching steadily and insistently away from freedom.

The Index is an annual international study of 184 countries around the world that focuses on 10 measures of economic freedom, including property rights, investment freedom, and business, trade, fiscal and monetary policy freedoms. Scholars, economists and PhD’s from the Heritage Foundation and the Wall Street Journal assemble data and then rank countries on their level of economic freedom.

There is a chain link connection between increased regulation, and higher taxes and spending, and the destruction of economic and personal freedom of the people. Americans have less economic freedom than we did even a few short years ago, and we are dragging much of the “free world” down with us.

As reported in Ed Feulner’s WSJ editorial about the 2012 Index:

“Most of the decline in economic freedom was in countries in North America and Europe. Canada, the United States and Mexico all lost ground in the index, and 31 of the 43 countries in Europe suffered contractions. They ought to know better. These are the very countries that have led the world-wide revolution in political and economic freedom since the end of World War II. But now, weighed down by huge welfare programs and social spending that is out of control, many governments are expanding their reach in ways more reminiscent of the 1930s than the 1980s.

How about the U.S., historically the country more responsible than any other for leading the march of freedom? Under President Barack Obama, it has moved to the back of the band. Its economic freedom score has dropped to 76.3 in 2012 from 81.2 in 2007 (on a scale of 0-100). Government expenditures have grown to a level equivalent to over 40% of GDP, and total public debt exceeds the size of the economy.” (Emphasis added.)

But does economic freedom matter? Which Americans does our ongoing crushing of economic freedom hurt?


• Individual property rights -- one measure of economic freedom-- are basic in a free society.

o “Property rights” mean at a minimum that individuals and families have the potential to work and save money to achieve the American dream of home ownership, as contrasted with Communist and other repressive, socialist regimes that prohibit individuals from owning private property. The government owns it all.

o Newly created, onerous regulations and high taxes in America today make saving for and buying property far more difficult than in the past, severely limiting or eliminating people’s ability to buy a home.

o Just one specific example among many new taxes and regulations: a new tax (under the healthcare takeover law!) imposes a 3.8% tax on income from home sales and home rentals as unearned income. Numerous EPA regulations also make selling older homes very expensive.

o Foreclosures on homes owned by Americans are at record numbers, nearly 30% of Americans owe more on their mortgages than their houses are worth, and large numbers fear home ownership is risky, and do not expect their homes to hold value.

• Economic freedom means the opportunity for opportunities. It means that government doesn’t unduly interfere with hard working people and their desire to build the businesses of their dreams, to make a living from them, and to keep most of what they earn.

o It means that businesses exist so that our children finishing high school and college can find jobs.

o Lower income Americans are less financially able to start their own enterprises, and need to find jobs in stable, established businesses, small or large.

o As the Democrat-led explosion of growth in federal government regulation, taxation and power occurred over the last four years, unemployment has remained staggeringly high, (statistics that make it look like unemployment figures are going down deceptively exclude the millions of Americans who have given up looking for jobs), so we’ve experienced the longest period of high unemployment since the Great Depression. Filings for “disability” have skyrocketed (there are 39 states with fewer total citizens than the number of Americans on disability). Family net worth is down 40% under Obama. So people do not have the money to buy homes or the income from jobs to start saving for one.

• It’s raining regulations:

o In the first three years of the Obama administration, he imposed nearly four times the new regulations than his predecessor did at the same point, at over five times the cost to American citizens.

o Thousands of new federal regulations will hit U.S businesses in 2013, with just the top 13 most expensive ones costing the U.S economy $515 billion.

o On the Friday before Christmas, 2012, Obama released a staggering list of new regulations that he will impose on America’s businesses and individuals.

o Regulations strangle businesses, so they have no ability to grow and create jobs, so people who need jobs cannot find them. And on and on it goes.

• The polar opposite of economic freedom is communism, and its ugly stepsister socialism. Consider the communist nations of Cuba, and North Korea, two of the most economically “unfree” nations in the world.

o In 2011, half of North Korea’s Army was starving. Credible reports say that over 5 million North Koreans starved to death in the last 10 years.

o Cubans are in a panic over the ill health of Venezuelan President Hugo Chavez because their nation is so completely dependent on Venezuela for food and other basic necessities. Cuba “still has a cash-strapped centrally-planned government-run economy” and its people are completely dependent and completely helpless. Cubans literally and realistically fear starving to death if Chavez dies because self-sufficiency has been crushed and improving one’s plight through hard work is economically and legally impossible.

o Both Cuba and North Korea defend their economic control over society as intended to “provide” for all citizens, to make life fair by equally distributing wealth, with the result of equally distributing human suffering and misery.

History has taught us that big, powerful central government and its consequent crushing of individual economic freedom causes suffering, for the poorest among us, and for everyone else.

These are “big issue” times in America, with far more at stake than particular tax proposals or spending cut ideas. The overarching question is whether Americans wish to continue our two hundred plus year history of abundant economic opportunity and unparalleled personal freedom, or do we wish to slither and slide down the path of big government controlled economies that crush personal freedoms and opportunities, in exchange for government promising to “take care of” our every need.

You can’t have it both ways, and the challenge is to connect the dots between the offers of “free stuff” and “government provided everything,” and the loss of real freedom.

The Index of Economic Freedom validates what Americans who work hard and pay taxes know in their hearts: freedom is slowly and surely evaporating in America as government is growing in power and control over society and our economy. It is up to the American voters and active citizens to tell our elected officials that we want our freedom back.


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