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Can someone give a me a quick rundown as to why Venezuela's economy is tanking? I just dont see why it is. As you as you can supply your own fuel, and have a year round growing season, how bad can you economy get?
Those are the two most important things, fuel, and food. I am hearing now there is some extreme rationing of food. Like if you a foreigner, you cannot purchase food at the store. You need some ID to do this.
In a nutshell, poor management, both short term and long term. Their government spends more than it collects, is restrictive of foreign trade, and defaults on foreign credit. Over the long term, their government did not prepare to be self reliant - by pushing domestic food production for example - instead relying on the easy money from their oil production and apparently not exercising any kind of restraint in spending.
Their economy was in trouble well before crude prices started dropping, that trend is just accelerating their inevitable collapse.
Location: SF Bay Area, aka, Liberal Mecca/wherever DoD sends me to
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Quote:
Originally Posted by NJ Brazen_3133
Can someone give a me a quick rundown as to why Venezuela's economy is tanking? I just dont see why it is. As you as you can supply your own fuel, and have a year round growing season, how bad can you economy get?
Those are the two most important things, fuel, and food. I am hearing now there is some extreme rationing of food. Like if you a foreigner, you cannot purchase food at the store. You need some ID to do this.
reasons why:
-extreme socialism gone amok
-government mismanagement of debts and oil industry
-price controls (these always backfire and create shortages) and too many regulations
-over dependence on the oil industry
Socialism in one country is hard to sustain. That's why, at minimum, regional revolutions are necessary. Venezuela's allies are middle income countries, not high income/high HDI countries, and Socialism and outside profit-driven capital investment rarely go together for very long.
That didn't workout so well for USSR; did it. When we look at china we see socialist country that shifted towards capitalism to achieve success. One only has to look at North Korea versus South when south korea was in socialist dominate region with USSR and china right there. The Taiwan ;japan after WWII. One government gets its hands on most of GDP to transfer; the national wealth building that creates it starts to collapse.
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