The Fraser Institute released its annual study of economic freedom among the 50 U.S. states and 10 Canadian provinces last week and our neighbors to the north seem to be learning lessons that used to be ingrained American principles that we recently, seemingly, have eschewed. That includes the Old Dominion which dropped in the rankings, again. This time from 19 to 21 out of the 60 jurisdictions. According to a Fraser Institute statement, released in conjunction with the study:
The average score for U.S. states has fallen to 7.3 (out of 10) in 2011 from 8.2 in 2000 at the all-government level. While the Canadian provinces have also seen a decline (down to 7.4 in 2011), on average they are now freer than U.S. states.
"The freest economies operate with minimal government interference, relying on personal choice and markets to decide what's produced, how it's produced and how much is produced. As government imposes restrictions on these choices, there's less economic freedom," said Dean Stansel, study co-author and economics professor at Florida Gulf Coast University.
The top of the freedom pecking order of freedom reads like this: The Canadian provinces of Alberta and Saskatchewan, with Delaware third followed by Texas and Nevada. After that, the highest states are Wyoming, South Dakota, Colorado, Nebraska, Georgia, Utah and Illinois, which rank eight through 14, respectively.
Andrew Young, an associate professor of economics at West Virginia University, said the rankings were based on size of government, level of discriminatory taxation and amount of labor market freedom. Virginia's liabilities are the fact that government spending is a large part of the commonwealth's economy and its indirect tax burden on its citizens and businesses. Indirect taxes are property taxes, fees and such that are not spelled out directly, such as income or sales taxes.
Dr. Young told WRVA's Richmond Morning News yesterday (listen to the complete, and brief, interview below):
This is important because if you look at study after study . . . they consistently find that economic freedom — having smaller government, less regulation — this is linked to higher incomes and more job creation, just basically a more vibrant economy. ...
Virginia has been slipping over the years . . . and bloated government and onerous tax burden discourages businesses from investing in Virginia and creating jobs.
His solutions? Pretty basic and common sense, which many politicians in Virginia seem to have forgotten in recent years: 1. Reign in the amount of government spending. 2. Create less burden on businesses. You think that will happen in Virginia during the next four years if it didn't happen the last four? So much for the Commonwealth of Opportunity. Remember that? (Governor Bob McDonnell's outgoing budget, released yesterday, increases spending by $10 billion. See Norfolk Virginian-Pilot.)
Separately, a new study ranking the 50 states on opportunity also was released recently. Virginia ranked 15th. Vermont ranked first. Vermont? Virginia, first in freedom, now is easily outranked by states such as Vermont (home to the only publicly proclaimed socialist U.S. Senator, Bernie Sanders) and Canadian provinces in economic freedom and opportunity.
But there is good news: We're ranked higher than West Virginia, which is dead last in economic freedom, according to Fraser. In this day and age, take your wins where yo can get them.
Dr. Young's solution? 1. Reign in the amount of government spending. 2. Create less burden on businesses. You think that will happen in Virginia in the next four years if it didn't happen the last four?