"The economic freedom is the freedom which really matters the most"

The economic situation in the USA has been quite unusual ever since the beginning of the financial crisis. June 2008 predictions for the GDP growth  were oscillating somewhere  between 3.8% and 5.0% but never really came true. The reason for the poor economic performance of the USA, according to Senator Phil Gramm, a keynote speaker during a lecture co-organized by CASE, FOR and American Studies Center, University of Warsaw, was fourfold:

First of all - tax system; the lower the taxes the quicker the growth – here Senator Gramm quoted Texas as a perfect example of how low taxes may speed up growth. Secondly – regulations; current Government has imposed as many regulations in one year as Ronald Regan did during his whole term. Thirdly – public debt; the public debt in US has doubled over the last 6 years and Senator Gramm believes it may reach 70% of the GDP soon. Finally - (lack of) efficiency; America has always been proud of  its advanced and efficient labor and capital markets. Many Americans used to work two or even three jobs. Nowadays, more and more people are on food stamps and the number of those officially recognized as disabled has increased by 24% – in Senator Gramm’s view it is the regulations implemented by the current government that made the labor market less competitive and inefficient. As for the capital market, the US has entered the age of crony capitalism, with the government deciding which industries should be subsidized.

Senator Gramm, an American economist and politician, former Democratic Congressman and a Republican Congressman, as well as a former Republican Senator from Texas, strongly criticized the current US government and continuously underlined that “good things occur when you have  good policies. No matter how good people you have and no matter how hardworking they are”. In his view, the underlying assumption among American politics and economists alike was that “there is never anything wrong with America” and it will always manage to get out of any crisis or critical situation.

In the discussion that ensued after his presentation Senator answered  questions of both economic and political nature; the discussion was moderated by prof. Leszek Balcerowicz, dr Christopher Hartwell and prof. Bohdan Szklarski.

The main message put forward by the Senator was that “the economic freedom is the freedom which really matters the most”.