February 07, 2022
Center for American Prosperity
The Key To Prosperity
February 07, 2022
By James Carter and Robert Meyne in the Daily Caller
The Commerce Department recently reported that the U.S. economy grew at an annualized rate of 6.9% last quarter. While that may sound like fantastic growth, dig beneath the topline number and you find that arcane economic statistics can be, and often are, misleading.
With inflation at a 40-year high, consumers may not understand the intricacies of the Consumer Price Index, but they know they’re paying far more for gas, groceries and, well … virtually everything.
But there is one reliable indicator of our economic health that we can all understand. It is this: How much freedom do you have?
Pervasive individual freedom, when vigorously safeguarded, leads to opportunity, happiness and prosperity. Yet, liberals want dramatic increases in government control, more interference in your life, bigger budgets, higher taxes and less individual freedom.
Joe Biden ran for president as an alleged moderate but, once in office, later bragged he would be the “most progressive president in history.” Given the array of executive orders and presidential memoranda he issued on his first day as president, his commitment to moderation was literally shorter than the lifespan of a mayfly. (Mayflies live upwards of 24 hours.)
Although stalled on Capitol Hill, the president’s so-called Build Back Better agenda would, if adopted, constitute one of the largest expansions of big government socialism in U.S. history.
There is compelling evidence from around the globe of the link between freedom and prosperity. Consider two publicly accessible sets of data, one related to freedom, the other to economic growth.
First, the Fraser Institute’s Economic Freedom of the World report for 2021 finds that countries “in the top quartile of economic freedom had an average per-capita GDP of $50,619 in 2019, compared to $5,911 for nations in the bottom quartile.” Further, “the average income of the poorest 10% in the most economically free nations is more than twice the average per-capita income in the least free nations.”
The second is a list from the 2021 World Population Review of the world’s freest countries. Again, stable democracies, where individual rights are widely respected, dominate the list.
Unsurprisingly, there is not a single socialist nation high on either list. President Biden and the congressional leadership should be asked this question: If big government is the way to improve people’s lives, why has it not worked anywhere it has been tried?
“Democratic socialism” is a fashionable term concocted by people who support socialism but don’t want you to react to it negatively. But it describes a type of nation that does not exist. There are no free, democratic, socialist countries. Socialism requires a loss of personal freedom and an expansion of the role of government. You can be socialist, or you can be free. Pick one. “Democratic socialism” is a contradiction in terms.
Of course, socialism may bring wealth to elected officials or the political and economic elite. Socialist hero Bernie Sanders, who was very nearly the 2020 Democratic nominee for president, has three homes — but socialism has never, in any nation, been a path to prosperity for the general population.
Fortunately, Americans can look to the previous administration’s record to see the positive impact of freedom-minded policies. Before the onset of the pandemic, the U.S. set several impressive records because of the Trump administration’s commitment to deregulation, tax reform and economic freedom. Consider the following:
- From 2001 to 2016, real median income fell $164. By contrast, robust economic growth and thriving labor market conditions caused incomes to soar by $5,000 from 2017 to 2019, with income growth setting a record in 2019.
- Workers across the income spectrum benefited from these gains, with wages rising faster for workers than managers and faster for the bottom 10% of wage earners than those in the top 10%, causing inequality to fall.
- This historic blue-collar boom lifted 6.6 million people out of poverty from 2017 to 2019 — the largest 3-year reduction to start any presidency since the War on Poverty — and sent the poverty rate to an all-time low of 10.5 percent in 2019.
The history of American politics is the story of a conflict between two basic sets of beliefs: One believes we should give more power and wealth to the government; the other is dedicated to increasing individual freedom and the role of the private sector. That is the most important distinction between America’s leading political movements.
America’s founding documents remind us that securing individual rights was the priority of our Founders. It should be ours as well.
James Carter serves as Director, Center for American Prosperity for the America First Policy Institue (AFPI).