Heritage Foundation Reveals US Double Jeopardy

In its 2012 Index of Economic Freedom, the Heritage Foundation analysts and economists spoke to the current double jeopardy facing the US Economy:  The increase in the debt to GDP ratio, and the resulting restriction of economic freedom in enterprise.

The permanent increase in the ratio of public debt to GDP…is prima facie evidence of policy failure. The high levels of public debt accrued in many countries thus reflect years of bad public financial management and the cumulative impact of poor policy choices. Such poor policy choices are highly likely to have restrained economic freedom as well…

Historical data from the Index of Economic Freedom show a clear negative relationship between the accumulation of debt and economic freedom. In general, countries with lower levels of public debt as a percentage of GDP tend to enjoy high levels of economic freedom…. There is an even stronger negative relationship between debt-to-GDP ratios and economic freedom for advanced economies than there is for developing economies.

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