The horrific reality of socialism continues to grow worse in Venezuela.
By the end of this year, the International Monetary Fund projects inflation in the socialist country will reach one million percent as the government prints money to pay for unsustainable socialist policies. According to Bloomberg, IMF officials are comparing the situation to the hyperinflation crises of Germany and Zimbabwe in the past.
The crisis is comparable to that of Germany in 1923 or Zimbabwe in the late 2000s, said Alejandro Werner, head of the IMF’s Western Hemisphere department. He forecast the economy to shrink 18 percent in 2018 — the third consecutive year of double-digit contractions — as oil production falls significantly.
“The collapse in economic activity, hyperinflation, and increasing deterioration in the provision of public goods as well as shortages of food at subsidized prices have resulted in large migration flows, which will lead to intensifying spillover effects on neighboring countries,” Werner wrote in a blog post.
Hyperinflation is an economy’s nightmare scenario. The value of a country’s currency plummets and prices rise so rapidly that people are left unable to buy basic necessities like food. Savings become worthless, financial institutions collapse, tax revenues disappear, and government services cease to exist. In the worst cases, a country’s economy can be so devastated that the national currency is no longer accepted for trade and people must resort to bartering goods for other goods.
Venezuela’s President Nicolas Maduro is blaming all of his problems on his opponents waging an “economic war” against the country. The reality is that Venezuela’s socialist price controls and unsustainable government programs have waged economic war on its citizens. As a result, the people of Venezuela are fleeing their country, many attempting to come to the United States.
Democrats in America like Bernie Sanders or Alexandria Ocasio-Cortez argue their platform of so-called “Democratic socialism” can alleviate poverty in America and create a more just economy. But someone has to pay for “free” college tuition, “free” nationalized health care, “free” universal basic income. There is not enough money in America to pay for these programs.
The United States government is projected to run a $1 trillion budget deficit in 2019. America’s $21.2 trillion gross national debt is bigger than the gross domestic product, meaning that everything we owe is more than everything we make. The government is borrowing money and printing money to make up the difference and pay the interest on the debt each year. This is unsustainable.
Continuing on this path in America is a recipe to end up exactly like Venezuela. And when the economy fails here, where do we flee?
Chris Pandolfo is a staff writer and type-shouter for Conservative Review. He holds a B.A. in politics and economics from Hillsdale College. His interests are conservative political philosophy, the American founding, and progressive rock. Follow him on Twitter for doom-saying and great album recommendations @ChrisCPandolfo.
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