We now have the opportunity to see how Bernie Sanders socialism works in real life. We only need to look to our neighbors to the south in Venezuela.
Socialists quickly run out of other peoples’ money but Venezuela’s situation is truly unique because they can’t even pay for their money, according to Bloomberg. They don’t have diapers, cancer medicine and other drugs, toilet paper, feminine products, food and now money to pay for their money.
Their unfettered inflation is so out of control that they can’t keep up with the pace of price increases. Their cash is imported. Hard currency is sinking to critically low levels.
Foreign providers have to wait so long for payment that they aren’t bothering to sell to them any longer, that includes the money makers. De La Rue, the world’s largest currency maker, is owed $71 million, according to Bloomberg.
Venezuela’s inflation, the world’s highest, is expected to rise this year to close to 720 percent this year.
The economy shrank by 5.7 percent in 2015 and hasn’t experienced positive growth since 2013. Venezuela’s currency, the bolívar, has shed 93 percent of its value in two years and is worth less than a US penny. The country has literally run out of food, forcing the government to declare a “nutritional emergency.”
Bloomberg reported that Steve Hanke, a professor of applied economics at Johns Hopkins University, who has studied hyperinflation for decades, says that to maintain faith in the currency when prices spiral, governments often add zeros to bank notes rather than flood the market.
“It’s a very bad sign to see people running around with wheelbarrows full of money to buy a hot dog,” he said. “Even the cash economy starts breaking down.”
President Maduro just ordered a two-day work week – Monday and Tuesday – to save on energy and electricity. The country’s most important source of electricity – El Guri dam – is at record-low levels. About 20% of the country’s workforce will be on this schedule.
Maduro is a typical socialist and the reason for the shortage is incompetence, corruption, and overall mismanagement.
More on Venezuelan socialism here.