"The increasing cronyism that has accompanied the growth of government has undermined the rule of law, further eroding America's economic freedom"
- Heritage Foundation's 2014 Index of Economic Freedom
Freedom – is the cornerstone of the U.S. economy. However, during the last several years this postulate began losing its importance. Hence, it was not a surprise that the world's largest economy lost its position among world's top ten most economically free countries. According to the Heritage Foundation's 2014 Index of Economic Freedom, America dropped two notches to rank 12th, marking the seventh straight drop. The index is based on freedom in four categories: rule of law, limited government and open markets and regulatory efficiency. The main reason for such a weak performance is an absence of meaningful fiscal reforms, which in turn, led to a weakening of the government's balance sheet and ballooned the debt. During the third quarter of 2012 the U.S. government debt as a percentage of GDP climbed to 99%, the data from the Federal Reserve showed.
The sequester, partial government shutdown, costly regulations in finance and controversial healthcare programme, all slowed the job-creation process and hurt economic growth last year. While the latest GDP report surprised markets on the upside, without these "effective" measures economy could perform even better. Nonetheless, a further decline in the ranking of one of the world's most economically free country will embolden the Republican Party, and will certainly tarnish the President's administration.
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