Why the Jobs Haven't Come Back And Why Bigger Government Moves Us in the Wrong Direction

The current economic recovery, if it can even be called that, is the slowest since the Great Depression. Unemployment continues to be near 9% nationally, and over 12% in Nevada, and there are still fewer people working than when President Obama took office. The Federal Reserve Board, in an announcement today, expects the unemployment rate to be above 8% by the end of 2012.

It's not by accident that the recovery has been so sluggish. As the Heritage Foundation and Wall Street Journal's annual Index of Economic Freedom reveals, the level of economic freedom in the United States is falling. Less economic freedom equates to less opportunity, and fewer jobs.

The Economic Freedom Project presents a video showing the decline of economic freedom in the United States and its consequences.



Government overspending and overregulation is strangling the economy and stifling recovery.

As the growth of federal government spending has sped up, it’s caused the growth of the private economy to slow down. As a result, the US is going through the longest streak of high unemployment since the Great Depression.

The Economic Freedom Project has also conducted research on economic freedom within the states and Canada's provinces. For Nevada, while there is good news, it is outweighed by the bad. The bad news helps to explain why the Silver State's recovery has been far too slow.

While Nevada's ranking compared to the other US states and Canadian provinces has improved over the years, that is more a reflection of the fact that other states are becoming worse, not that we're getting better. Nevada's overall score has fallen recently. The state is currently ranked as the 4th freest, although its overall economic freedom score peaked in 2005 and has since shown a steady decline. Nevada's score for 2009, the latest year for which data is available, was its lowest since 2001.

The main reasons for Nevada's declining scores are increased government spending and declining labor market freedom. Nevada's score has fallen nearly 20% since the enactment of the state's minimum-wage law. This law set a two-tiered minimum wage higher than the national minimum and indexed it for inflation so it can increase every year.

This loss of economic freedom is the reason the jobs are not coming back. Until we reverse the trend we will be postponing the day a true recovery takes hold.

The Economic Freedom video is Part Two of a series. We featured Part One a few months ago.