For Venezuela, the bill for two decades of socialism has come due:
Venezuela has been in deep recession for most of the last year. Its budget deficit in October 2014 – before the most recent catastrophic oil price falls – was 17%. Inflation is officially at 65%, unofficially probably far more. Import controls, inflation and the overvalued bolivar are causing shortages of essential goods.
Shortages are nothing new in Venezuela. Indeed, a shortage of toilet paper has been the subject of global amusement for quite some time. But recently, the shortages have become much worse. Last week, a government official was jeered for saying that long lines indicated that “Venezuela has plenty of food”, when rows and rows of empty shelves in stores were telling a different story. Bloomberg reports that people are queueing overnight for necessities such as soap, milk and diapers. This is very dangerous. Venezuela is already one of the most violent societies on earth. And when shortages start to affect little children, people get angry.
Statism makes everything plentiful and cheap, except for stuff.
You wonder how Venezuela will claw its way out of this hole?