4 Ways to Fix Economies Around the World

Something’s amiss with the world’s economy. And it goes way beyond stock-market woes in China and elsewhere.

Something’s amiss with the world’s economy. And it goes way beyond stock-market woes in China and elsewhere.

Economists point to debt and low economic growth as the culprits, but this explanation only touches the surface. To turn around the world’s economy, we’ll need to understand the deeper problems.

A study just published by the Heritage Foundation provides some answers. A 2015 Global Agenda for Economic Freedom, authored by James M. Roberts and William T. Wilson, identifies a set of distinct economic problems now afflicting the world’s economies. The most serious are the huge costs associated with oversized governments.

The 2015 edition of Heritage’s and The Wall Street Journal’s Index of Economic Freedom showed that the growing size of governments is the most negative and striking trend in the global economy. Reflecting the tendency of China and other governments to engage in so-called “stimulus” spending, the score measuring government spending dropped 0.8 points in the 2015 Index. It is this negative trend that accounts for much of the world’s debt crisis.

Other declining Index scores showed that, on a global basis, freedoms to conduct business, exchange labor, protect property, and make financial transactions have suffered as well. These factors are a drag on economic growth and investment. When added to the massive overlay of debt caused by too much government spending, they act like an undertow, forever pulling back on the tide of economic growth and progress.

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Source: 4 Ways to Fix Economies Around the World