FAILING SOCIALIST VENEZUELA DRASTICALLY INFLATES MONEY SUPPLY

WND EXCLUSIVE

FAILING SOCIALIST VENEZUELA TRIES TO TIME TRAVEL OUT OF TROUBLE

Regime turns clocks forward, drastically inflates money supply

Paul Bremmer

As Venezuela slides closer to the abyss, the country’s socialist leaders have been trying everything to stop the tailspin.

In February, President Nicolas Maduro raised fuel prices by more than 6,000 percent to try to cover the country’s next debt payment. To try and conserve electricity, he proclaimed every Friday in April and May a holiday for public employees and urged women to stop using hairdryers. Amid rapid inflation, Maduro raised the minimum wage by 30 percent.

Now the regime has shifted the country’s time zone forward 30 minutes to try and reduce electricity usage in the evenings. This comes nine years after Maduro’s predecessor, Hugo Chavez, moved clocks back 30 minutes in a misguided attempt to allow children to walk to school in daylight.

Paul Kengor, a college professor and author of “Takedown: From Communists to Progressives, How the Left Has Sabotaged Family and Marriage,” said Venezuela needs to start reforming in more fundamental ways.

“Instead of the regime moving the country’s time ahead 30 minutes, they should be moving it forward into the horizon of free markets,” Kengor told WND. “They have looked backward to 1848, the year of Karl Marx’s ‘Communist Manifesto,’ rather than to a future of economic freedom.”

There was a time when Venezuela prospered with a large middle class and high property ownership. However, a series of economic crises in the 1980s and 1990s convinced many Venezuelans they had to change their country’s direction, and they thought socialism was the answer. They elected Chavez president in 1998, and after Chavez died they elected his vice president, Maduro, to continue Chavez’s socialist policies.

Frequent electricity shortages have plagued Venezuela over the past 17 years of socialist rule. Part of that is due to low water levels at the Guri dam, which produces 40 percent of the country’s electricity. But William Murray, author of “Utopian Road to Hell: Enslaving America and the World with Central Planning,” points to another reason for the shortages.

“The reason that there are electricity failures, power failures, in Venezuela is because power in Venezuela is supplied in the same way that Bernie Sanders wants to supply education and medicine in the United States – free of charge,” Murray told WND. “There is no charge for electricity in Venezuela. It is considered a right of the people to get power, and because of that, there’s no way to ration it other than for the government to cut it off and tell people they can’t have it.”

Murray clarified that the price of electricity is so low it “might as well be free.”

The Venezuelan government fixed the official price at 3 cents per kilowatt hour, but Murray said only businesses pay that. The unofficial rate is about half a cent per kilowatt hour. Contrast that with the United States, where electricity costs about 10 cents per kilowatt hour.

The problem, according to Murray, is electricity cannot be delivered for half a cent, so the artificially low price leads to demand that is greater than supply. It’s a problem only the free market can solve.

“In a free market system, if something is not available in enough quantity, the price of it goes up and then the amount of money in excess of that is used for development in order to produce more power, and then the price goes back down,” Murray explained. “They don’t have that in Venezuela. They have no recovery for the funds. They have no way to get the money back because they simply don’t charge enough for the electricity.”

Just as the Venezuelan regime has mismanaged the electricity situation, it has mismanaged the country’s money supply. Faced with rising inflation, the regime responded by more than doubling the supply of paper bolivars in 2015, causing hyperinflation. According to the IMF, Venezuela’s inflation rate had been 63 percent in 2014; it rose to 275 percent in 2015 and is projected to skyrocket to 720 percent this year.

The Venezuelan central bank’s own printing presses didn’t have enough security paper or metal to print more than a small portion of the money the government wanted, so they flew in dozens of cargo planes full of bolivars printed abroad. However, declining oil revenues have left Venezuela with fewer U.S. dollars with which to pay the printing companies for all the new bolivars, leading to an awkward situation where Venezuela is too broke to pay for its own money.

The money problem adds to the misery of food and medicine shortages, dirty air and water, and a violent crime wave. It also exacerbates the electricity crisis, according to Murray.

“Keep in mind the inflation rate in Venezuela has been 200 percent a year and the cost of electricity hasn’t moved, but the cost in Venezuela to supply that electricity has gone up 200 percent a year,” Murray said. “So they’re getting less and less and less real money in order to supply that electricity because of that magic think of determining, ‘This is what the people should pay – not the free marketplace, not supply and demand.'”

Kengor, for his part, said Venezuela has socialism to thank for its many troubles today.

“This is the legacy of Hugo Chavez and friends,” Kengor said. “Chavez, remember, was a Barack Obama admirer and very harsh critic of George W. Bush, who he compared to the devil. In the eyes of Chavez, God’s angels were the likes of Obama and the socialists and collectivists and redistributionists. 

Chavez, too, was a fundamental transformer, and he fundamentally transformed an oil-rich nation (with America as its largest customer) into a socialist paradise — which is to say, an economic basket case.

“We should not let off the hook the people of Venezuela, who have enabled and even voted for the Chavez-socialist mindset for years. They are reaping what they have sown. And like so many leftists, they will blame everyone but themselves and their literally bankrupt ideology.”

Read more at http://www.wnd.com/2016/05/failing-socialist-venezuela-tries-to-time-travel-out-of-trouble/#hM1oRQQgGmB9OA7D.99

My comments: Obama and the Democrats are taking the U.S. the same Route as Venezuela--BANKRUPTCY! Yet American Voters keep putting them in Office. America will Pay a Heavy Price for this Malpractice.