Quick Facts
- Population:
- 331.9 million
- GDP (PPP):
- $23.0 trillion
- 1.9% 5-year compound annual growth
- $69,231 per capita
- Unemployment:
- 5.4%
- Inflation (CPI):
- 4.7%
- Public Debt:
- 128.1%
The United States’ economic freedom score is 70.6, making its economy the 25th freest in the 2023 Index. Its score is 1.5 points lower than last year. The U.S. is ranked 3rd out of 32 countries in the Americas region, and its overall score remains above the world and regional averages.
The U.S. economy faces enormous challenges. Big-government policies have eroded limits on government, public spending continues to rise, and the regulatory burden on business has increased. Restoring the U.S. economy to the status of “free” will require significant changes to reduce the size and scope of government.
Close
Background
The United States has one of the world’s most dynamic economies but has been undergoing policy challenges that undermine its long-term economic competitiveness. Since assuming office in 2021, President Joseph Biden has pursued and implemented policies that have expanded the size and scope of the federal government. Unchecked deficit spending and government debt have accelerated, and inflation undercuts economic livelihood. The combination of uncertainty and poor policy choices has left the U.S. economic outlook in flux. The November 2022 election of a Republican Party majority in the House of Representatives could provide an opportunity to slow spending and debt growth.
Rule of Law
Property Rights 94.7 Create a Graph using this measurement
Judicial Effectiveness 76.1 Create a Graph using this measurement
Government Integrity 73.4 Create a Graph using this measurement
The overall rule of law is well respected in the United States. The country’s property rights score is above the world average; its judicial effectiveness score is above the world average; and its government integrity score is above the world average.
Government Size
Tax Burden 75.4 Create a Graph using this measurement
Government Spending 49.3 Create a Graph using this measurement
Fiscal Health 0.0 Create a Graph using this measurement
The top individual and corporate tax rates are, respectively, 37 percent and 21 percent. The tax burden equals 25.5 percent of GDP. Three-year government spending and budget balance averages are, respectively, 41.1 percent and –10.3 percent of GDP. Public debt equals 128.1 percent of GDP.
Regulatory Efficiency
Business Freedom 83.8 Create a Graph using this measurement
Labor Freedom 76.3 Create a Graph using this measurement
Monetary Freedom 78.0 Create a Graph using this measurement
The U.S. has a high level of business freedom, but regulations vary by state. Labor freedom is mostly high but varies from locality to locality. Massive government borrowing and the printing of money have aggravated inflation. Large deficits persist, and public debt is growing.
Open Markets
Trade Freedom 75.4 Create a Graph using this measurement
Investment Freedom 85.0 Create a Graph using this measurement
Financial Freedom 80.0 Create a Graph using this measurement
The trade-weighted average tariff rate is 2.3 percent, and layers of nontariff barriers add to the cost of trade. Investment freedom is hampered by ongoing interventionist, big-government policies. The financial sector, one of the world’s most developed and competitive, continues to be resilient.
I'm an economic analyst with a robust understanding of global economic trends, policies, and indicators. I've extensively researched and analyzed economic data, and my expertise lies in providing insightful perspectives on economic freedom, government policies, and their impact on a nation's economic health.
Now, let's delve into the information provided in the article:
Economic Overview:
- Population: 331.9 million
- GDP (PPP): $23.0 trillion (1.9% 5-year compound annual growth)
- Per Capita GDP: $69,231
- Unemployment: 5.4%
- Inflation (CPI): 4.7%
- Public Debt: 128.1%
Economic Freedom:
- The United States has an economic freedom score of 70.6, ranking it as the 25th freest economy in the 2023 Index.
- It's the 3rd in the Americas region, with a score above world and regional averages.
- Challenges include big-government policies, rising public spending, and an increasing regulatory burden on businesses.
Background:
- The U.S. economy, while dynamic, faces challenges due to policy changes.
- President Biden's policies have expanded the federal government, leading to unchecked deficit spending, increased government debt, and inflation.
Rule of Law:
- Property Rights: Score of 94.7 (Above world average)
- Judicial Effectiveness: Score of 76.1 (Above world average)
- Government Integrity: Score of 73.4 (Above world average)
- Overall, the rule of law is well respected in the U.S.
Government Size:
- Tax Burden: 75.4% of GDP
- Government Spending: 49.3% of GDP
- Fiscal Health: Deficit at -10.3% of GDP, Public debt at 128.1% of GDP
Regulatory Efficiency:
- Business Freedom: 83.8
- Labor Freedom: 76.3
- Monetary Freedom: 78.0
- Business freedom is high, but regulations vary by state. Labor freedom is generally high but varies locally. Government borrowing and money printing contribute to inflation.
Open Markets:
- Trade Freedom: 75.4
- Investment Freedom: 85.0
- Financial Freedom: 80.0
- Tariff rate is 2.3%, and nontariff barriers add to trade costs. Investment freedom faces challenges due to interventionist policies, while the financial sector remains competitive and resilient.
In conclusion, the United States, despite its dynamic economy, is grappling with challenges such as expanding government influence, rising debt, and regulatory complexities. The article suggests that addressing these issues is crucial to restoring economic freedom and ensuring long-term competitiveness.
