Canadian Study – U.S. States Plummet in Economic Freedom



If you or your business has unwarranted problems with any level of government – from ObamaCare and the IRS to local zoning ordinances – your economic freedom is being trampled. Further, there’s a connection between the arrogant trampling of our economic freedom and our unhealthy economic climate.
 

Coinciding with America’s economic decline, a leading Canadian public-policy think tank reports that citizens in many U.S. states are suffering from a decline in economic freedom. That’s the conclusion from a study by the Frasier Institute entitled, “Economic Freedom of North America 2012.” 

“Economic freedom is a key ingredient in creating prosperity,” said study co-author Nathan Ashby, a professor at the University of Texas at El Paso. “States with high levels of economic freedom provide families with higher standards of living.” 

ID-100148136 koratmemberFrasier Institute’s body of work encompasses more than 25 years by three Nobel laureates among more than 60 scholars.

The study measures the key indicators of economic freedom in the U.S. and Canada. 

The key indicators: 

1. Size of government

2. Taxation

3. Rule of law

4. Property rights 

“The heavy-handed regulation and extensive overspending by Washington in response to the domestic and European debt crises not only caused America’s global economic freedom level to drop, it’s now affecting economic freedom levels at the state level,” he added. 

U.S. compared to Canada 

Ironically, the report indicates economic freedoms have improved in the 10 Canadian provinces. Among 144-ranked nations in the 2012 “Economic Freedom of the World Index,” Canada ranks fifth. After being ranked second in 2000, the U.S. declined to No. 16. 

“The link between economic freedom and prosperity is clear: States that support low taxation, limited government, and flexible labor markets benefit from greater economic growth,” said Fred McMahon, co-author of the report. 

“In contrast, states with reduced levels of economic freedom see lower living standards for families and fewer economic opportunities,” he added. 

The report notes that the average per-capita GDP in 2010 for the top 10 states was $51,737 compared to $44,889 for the remaining states. 

Delaware, the most-economically free state, ranked first among all states for having the smallest size of government and most flexible labor market – while Alaska, Delaware, and Texas impose the lightest overall tax burdens.  

The states with low scores on these measures have corresponding low levels of economic freedom. New Mexico and West Virginia score worst for size of government. New Jersey and Rhode Island score worst for taxation. 

West Virginia, Alaska, and Hawaii score worst for labor market freedom at the all-government level (comprising federal, state/provincial, and municipal/local). 

Where’s the leadership? 

All of this means America needs leadership – not disingenuous politicians promoting dysfunctional public policy for their political gains. 

Everyone agrees the U.S. was in a much better fiscal situation in the mid-1990s during the Clinton Administration. Unlike the Obama Administration and Senate Majority Leader Harry Reid, who refused to allow a vote on the federal budget for several years until December 2013, President Clinton and Congress cooperated in a nonpolitical fashion. 

Mr. Clinton was effective because he was budget-minded, and he reached across the political aisle to negotiate with his opponents. It’s a matter of record that Mr. Clinton met with House Speaker Newt Gingrich on 35 occasions to discuss issues facing the country. 

In contrast, Mr. Obama doesn’t bother to meet with Congress. 

Evidenced by his incessant sarcastic name-calling and innuendos, Mr. Obama ostensibly prefers campaigning to sitting down and negotiating an economic recovery. 

Nor does Mr. Obama appear to care about the 23 million unemployed and under-employed Americans. He hasn’t even convened his own jobs council since January 2012. 

Worse, his administration has been caught in 10 misrepresentations in the promotion of the disastrous ObamaCare. You’ll recall the misrepresentations — such as being able to keep the same doctors, keep the same health-insurance coverage and $2,500 in average savings on premiums.

The obvious conclusions: 1. Congratulations to Canada. 2. America’s murky fiscal situation is unacceptable. 

Resource link: Download the economic freedom report 

From the Coach’s Corner, the decline in the average American’s economic freedom is not a recent development. I’ve been writing about it for several years in this portal’s Public Policy category. You’ll find well over 100 articles with solutions.

“The problem with the federal government is that common sense is not necessarily common.”

– Terry Detrick

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Author Terry Corbell has written innumerable online business-enhancement articles, and is also a business-performance consultant and profit professional.Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 

Image courtesy of koratmember at www.freedigitalphotos.net

Will Obama’s Lifetime Income Plan Confiscate Your Retirement?


Feb. 14, 2010

Instead of productive public policies to create jobs, the federal government is pushing an increasingly nerve-wracking idea.

The Obama Administration appears to be taking an elitist approach regarding your retirement plan – bureaucrats ostensibly think they know better than you regarding your retirement planning and money.

Yes, the federal government is considering proposals to convert your 401 (k) and IRA accounts to annuity-type plans.

ID-10042601 worradmuOn February 1, President Obama advocated amending government rules that permit 401 (k) retirement plans with annuities.

There have been multiple news accounts of the government’s scheme. A comprehensive BusinessWeek report concerning the Obama Administration and your retirement was published Jan. 8, 2010 but didn’t seem to attract much attention.

The article by Theo Francis explained the plan, and indicated the U.S. Treasury and Labor Departments want Americans to weigh in on the ideas to exchange their retirement plans into annuities. Carrying the annuity ball for the Obama Administration are Assistant Labor Secretary Phyllis Borzi and Deputy Assistant Treasury Secretary Mark Iwry.

The government has begun soliciting comments.

Naturally, there are several companies that would benefit because they sell annuities including AIG (the company that received a $182.3 billion taxpayer bailout). The major players also include MetLife, Hartford Financial Services, Lincoln National, and New York Life.

In general, annuities would seem attractive because they guarantee funds until a retiree passes away. The thought is they’re a hedge against retirees running out of savings. And some people seem to think that annuities are a viable option for senior citizens because of their losses in the stock market.

The article quoted a 2009 report that stated only 2 percent of 401 (k)s are switched to annuities.

Fidelity Investments reported the average 401 (k) fund decreased by 31 percent between 2007 and 2009.

Hence, the alleged government interest in retirement security for citizens.

A lot of money is in retirement plans: $3.6 trillion, according to a trade group in Washington – the Investment Company Institute.

So what, you ask?

Well, my sense is that the government bureaucrats have another furtive motive.

In 1993, Democrats were looking into ways to get control of retirement funds. During the Clinton Administration, there was a proposal to levy a 15 percent tax on retirement plans to share wealth with low-income citizens.

The scheme was attributed to Dr. Alicia Munnell, who was assistant secretary of the Treasury for economic policy. But the idea died with the 1994 voter revolution that swept Democrats out of office.

Early in my career, I enjoyed working for two insurance companies offering annuities. Because of the expensive fees, sales commissions were healthy which conjured images of me driving a new Lamborghini as a 20-something.

But in some ways it was embarrassing. Annuities were not flexible or affordable for many of my policyholders. Plus, the annuities would not have yielded sustainable retirement incomes.

If annuities seem like a good idea for your situation, fine. But for many, they’re not viable, and a government-backed enterprise would not be productive.

Just look at the mismanagement of the Wall Street bailouts. The plan was not transparent and was administered by bureaucrats with a conflict of interest.

The big banks still are not loaning money to deserving businesses and consumers, and the investment bankers are once again getting huge bonuses made possible by taxpayers.

Moreover, why give the federal government more power over your finances? If the government succeeds and does try to resurrect the Clinton proposal, redistribution of wealth represents another theft of your economic and political freedom.

Little wonder of the declining trust in our institutions. Government and the Federal Reserve have been behaving furtively and badly. Consider Bloomberg ‘s shocking expose: “Wall Street Aristocracy Got $1.2 Trillion in Loans from Fed.” Yes, $1.2 trillion in secrecy.

A government plan to provide lifetime income. I don’t think so.

My hope is that you give the Obama Administration a loud, ringing earful.

From the Coach’s Corner, by May 3, 2010, here are three options in which you can comment:

  • Via post office – U.S. Department of Labor, Office of Regulations and Interpretations, Employee Benefits Security Administration, N-5655, 200 Constitution Ave. NW, Washington, DC 20210, Attn: Lifetime Income RFI.
  • Via e-mail – E-ORI@dol.gov
  • Via the Internet – Visit Regulations.gov

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Ronald Reagan


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 




Photo courtesy of worradmu at www.freedigitalphotos.net

Seattle business consultant Terry Corbell provides high-performance management services and strategies.