Monday, July 29, 2013

Americans Bid America Farewell

Two pro-freedom friends have told me that they are relocating to foreign countries.  One, the head of an academic department at CUNY, is moving with his wife and 12-year-old daughter to a university in Dubai.  A second, the owner of a diner on Route 28 in Phoenicia, New York, told me that he is moving with his pregnant wife to the Philippines.  Both have numerous reasons for the moves: The former is frustrated with CUNY while the latter's wife is originally from the Philippines.   Both, though, named the American political-and-economic situation as an important consideration.

Benjamin Franklin said, "Where liberty is, there is my country."  Neither the UAE nor the Phillipines is, according to the Heritage Foundation's rankings, freer than the US.   However, I suspect the Heritage Foundation overrates the extent of freedom in the US.

The Heritage Foundation considers five countries as free:


1. Hong Kong  89.3
2. Singapore     88.0
3. Australia      82.6
4. New Zealand  81.4
5. Switzerland    81.1-0

In addition, the ranking lists 30 countries as mostly free:


6 Canada 79.4 -0.5
21 Georgia 72.2 +2.8
7 Chile 79.0 +0.7
22 Lithuania 72.1 +0.6
8 Mauritius 76.9 -0.1
23 Iceland 72.1 +1.2
9 Denmark 76.1 -0.1
24 Japan 71.8 +0.2
10 United States 76.0 -0.3
25 Austria 71.8 +1.5
11 Ireland 75.7 -1.2
26 Macau 71.7 -0.1
12 Bahrain 75.5 +0.3
27 Qatar 71.3 0.0
13 Estonia 75.3 +2.1
28 United Arab Emirates 71.1 +1.8
14 United Kingdom 74.8 +0.7
29 Czech Republic 70.9 +1.0
15 Luxembourg 74.2 -0.3
30 Botswana 70.6 +1.0
16 Finland 74.0 +1.7
31 Norway 70.5 +1.7
17 The Netherlands 73.5 +0.2
32 Saint Lucia 70.4 -0.9
18 Sweden 72.9 +1.2
33 Jordan 70.4 +0.5
19 Germany 72.8 +1.8
34 South Korea 70.3 +0.4
20 Taiwan 72.7 +0.8
35 The Bahamas 70.1 +2.1

The freedom rankings are based  on 10 measures of economic freedom (in parentheses) grouped in to four main headings:

  1. Rule of Law (property rights, freedom from corruption);
  2. Limited Government (fiscal freedom, government spending);
  3. Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and
  4. Open Markets (trade freedom, investment freedom, financial freedom).
It seems to me that one of the chief freedoms, freedom of exit, is given insufficient weight.  Freedom to flee a renegade state is so crucial to the overall state of freedom that it should be given a broader heading.  Among the mostly free and free countries America comes nearly last with respect to freedom of exit.  Expatriates' income is taxed and those who wish to renounce American citizenship have their retirement accounts taxed; for many Americans this makes exit tantamount to financial suicide.

In America, the median household wealth was $77,300 in 2010 and $126,400 in 2007, according to the New York TimesAccording to OECD data, which is probably a few years old:

Household net-adjusted disposable income is the amount of money that a household earns each year after tax. It represents the money available to a household for spending on goods or services. In (the) United States, the average household net-adjusted disposable income is 38 001 USD a year, much higher than the OECD average of 23 047 USD.

Household financial wealth is the total value of a household’s financial worth. In the United States, the average household net financial wealth is estimated at 115 918 USD, much higher than the OECD average of 40 516 USD and the highest figure in the OECD. While the ideal measure of household wealth should include real assets (e.g. land and dwellings), such information is currently available for only a small number of OECD countries.

Much of Americans' wealth is in IRAs and retirement accounts.  That money is taxed upon renunciation of US citizenship.


According to International Living the best places to retire are these:

1.Ecuador 100 95 73 62 72 45 86 96 81
2. Panama 93 100 62 63 77 74 93 69 80
3. Mexico 94 90 68 66 76 59 81 92 79
4. France 78 60 59 81 100 92 100 87 78
5. Italy 85 65 64 85 90 62 100 87 78
6. Uruguay 94 80 64 72 72 61 100 93 77
7. Malta 88 72 66 71 80 52 100 95 76
8. Chile 95 87 60 67 73 73 98 59 76
9. Spain 90 65 56 68 90 66 100 79 75
10. Costa Rica 95 76 62 60 78 60 95 79 75
11. Brazil 92 74 66 61 73 62 83 82 74
12. Argentina 92 60 61 70 82 56 100 91 74
13. Colombia 98 70 68 58 72 44 71 92 73
14. New Zealand 96 55 58 59 86 70 100 84 73
15. U.S. 57 78 57 79 78 100 100 80 73
16. Portugal 72 74 60 72 77 56 100 83 72
17. Australia 57 69 56 58 87 92 100 84 71
18. Belize 83 78 69 58 60 60 82 65 70
19. Malaysia 96 62 66 71 68 44 86 43 69
20. Ireland 78 80 28 81 79 60 100 65 68
21. Nicaragua 98 60 66 57 66 36 69 68 67
22. U.K. 57 80 30 70 84 80 100 66 67
23. Honduras 97 50 65 32 66 40 71 83 64
24. Dom Rep 97 60 58 47 60 40 70 57 63
25. Thailand 92 45 68 65 63 32 60 24

The only country freer than the US that is also a desirable retirement destination is Chile. This makes a choice difficult.  I am thinking of doing a systematic study of the top twenty countries on both lists to draw my own conclusions.  I haven't traveled much, so this would be an enjoyable and useful project.








4 comments:

Anonymous said...

Hong Kong and Singapore as free countries? You are kidding me right?

Mitchell Langbert said...

I kid you not. They are freer than the US is. Not that Hong Kong and Singapore are my ideal, but they are freer than the United States, and according to the Heritage Foundation they are the freest countries. This is your wake-up call.

Anonymous said...

In Singapore the Central Provident Fund (Abbreviation: CPF; Chinese: 公积金, Pinyin: Gōngjījīn) is a compulsory comprehensive savings plan for working Singaporeans and permanent residents primarily to fund their retirement, healthcare, and housing needs. It is administered by the Central Provident Fund Board, a statutory board under the Ministry of Manpower. The employer has to contribute 15.5% of the employee's monthly gross salary while the employee contributes 20% of his monthly gross salary. The CPF was started on 1 July 1955.

They have Obamacare. So much for economic freedom.

Mitchell Langbert said...

What about Social Security here? Also, the use of the dollar as a reserve currency around the world imposes a massive, hidden tax on Americans that likely outweighs the cost of compulsory savings.

I agree with your points. The Heritage Foundation spent a lot of time on it, and found that despite what you're saying the Singaporean economy is freer than the American.

Besides personal tax issues there are, of course, regulations on industry in huge areas that are important to economic growth.

Unfortunately, the last free country probably was the United States, and it ended around 1912.