Labor

Under Trump, US Economic Freedom Rises Significantly

Official portrait of President Donald J. Trump, Friday, October 6, 2017. (Official White House photo by Shealah Craighead)

U.S. economic freedom rose to the highest level in eight years in 2019, hopping up six spots on The Heritage Foundation’s annual Index of Economic Freedom.

The Heritage Foundation released the updated list of countries, from the most economically free to the least, Friday. The United States’s ranking in the index has risen since 2017 up to 12th, largely due to policies and deregulation pursued by the Trump administration, according to Anthony Kim, who leads the project for The Heritage Foundation.

“Higher economic freedom scores tend to correlate with faster growth and broader economic expansion, as well as higher incomes and overall wealth,” Kim writes in The Daily Signal, a Heritage Foundation publication. “In fact, per capita incomes in the freest countries as measured by the index are six to seven times higher than incomes in the least free countries.”

The Republican tax cut bill that passed Congress and Trump signed into law in December 2017 was the largest factor in economic growth through 2018, Kim said. The United States’ score rose 1.1 points, the largest gain of countries classified as “mostly free” in 2018’s index.

Unemployment hit a historically low level, 3.7 percent, in September 2018 and stayed low through November. The rate rose slightly in December, but remained under the 4 percent benchmark that economists largely consider to be “full employment.”

Small business optimism hit a record high in August, according to an annual survey by the National Federation of Independent Business. The survey beat out the previous record set under former President Ronald Reagan.

Tariffs and ongoing trade wars have made some economists uneasy about future economic growth and have hurt some industries. Business owners largely support President Donald Trump’s trade agenda and tariffs, however, according to an August poll by UBS Investor Watch.

Follow Tim Pearce on Twitter