The socialist paradise of Venezuela is about to default on its debt.
Now fellow Latin American socialist paradise Venezuela is gearing up for a default of its own, as precipitously falling oil prices have decimated the country’s budget and will continue to pressure its currency reserves. Since mid-June, crude oil prices have declined by more than 30%, with West Texas Intermediate (the benchmark measure for North American oil) dipping to $60.55/barrel before ultimately settling at a 5-year low of $61.54/barrel on Wednesday.
And to add insult to injury, Venezuela actually has to import some oil because the crude oil that they pump is hard to refine and they don’t have the refineries to do so. Aren’t you chumps in Venezuela happy you elected that rat bastard commie Hugo Chavez? It’s a good thing he died so he couldn’t inflict even more damage on your nation. What was it Maggie Thatcher said about socialism? Eventually “you run out of other peoples’ money”.
What’s really amazing is that over and over again this scenario plays out where ever socialism is tried. We even have side by side comparisons like North and South Korea and before the demise of the Iron Curtain, East and West Germany. Zimbabwe? It went from the bread basket of Africa to a basket case that needs to import food. Venezuela? Oil rich but on the verge of collapse. Even with all of these glaring examples, we still have people who think socialism will work, yannow, people like Barry Soetoro, Thunder Rodent Thighs, and the rest of the Dimocrat Party. Thomas Sowell has a quote where he sez that socialism has such a record of failure that only an academic could think it would work or words to that effect. There are always suckers who fall for that “spread the wealth around” bullshit and vote for people who sell that snake oil to them.
But back to Venezuela.
How is it that the country with the largest proven oil reserves—more than 297 billion barrels—sports an economy in such shambles? There are many reasons, but a few stand out:
1) There is an over-dependence on oil, which has lead to little investment and development in other sectors of the economy. According to CNBC, oil accounts for 95% of Venezuela’s exports, and combined with gas, accounts for 25% of its GDP. (In comparison, oil accounts for just 0.9% of the U.S.’s GDP.) Venezuela imports almost 80% of its consumption, and 20% of that comes from the U.S.
Not to mention that Venezuela nationalized not only it’s oil business but other businesses as well. Ask people in the old USSR how that worked out.
2) Venezuela gives away almost half of its oil. CNBC reports that about 1.2 million barrels of Venezuela’s average 2.6 million barrel-per-day production go to Cuba for free and to its own citizens at heavily-subsidized prices. According to Bloomberg’s Pain at the Pump chart, the average cost of a gallon of gas in Venezuela is $0.04.
Yeah. Let’s send oil to Cuba to prop up another socialist paradise. We rat bastard commies like to stick together.
3) The windfalls from the days of high oil prices were squandered. Hugo Chavez and his successor Nicolas Maduro, leaders of the United Socialist Party of Venezuela, siphoned PVDSA’s earnings into social programs and their own political campaigns. Recently, Maduro spoke of making budget cuts to high-level officials’ salaries and “luxury” spending, but went on to say, “[W]e will never cut one bolivar [the Venezuelan currency] of what we spend on education, food, housing… on our people.” Maduro has also vowed to increase oil’s prices back to $100/barrel, which is “where they should be.”
Good luck with that you rat bastard commie. The free market determines where the price should be. It’s that old Law of Supply and Demand that you rat bastard commies keep trying to circumvent. That’s another problem with you rat bastard commies. You have no concept of basic economics.
There’s more but it just chronicles how “successful” socialist policies have been in the socialist paradise of Venezuela.
Guess who else is getting screwed over by low oil prices? Russia. And not only oil prices but natural gas prices as well. Due to fracking, which Obunlger and the Dimocrats oppose, prolly ’cause they hate America (in Obunlger’s case that’s true. Imagine, having a president who hates his own country.), we are awash in natural gas. We have enough to export and sell to the Euroweenies thus enabling them to flip Putin the bird and buy from us. Hey Vlad, how are you gonna support your military adventures with the dropping energy prices? By the end of the decade, the United States will be the world’s largest producer of both oil and natural gas in spite of everything Oblunder and the Dimocrats have done to keep production down. Just imagine where we would be if Jug Husserin Ears Downgrade and the Dimocrat Party were on our side instead of the side of our enemies with their “smart” diplomacy and Thunder Rodent Thighs’ stupid Recharge Button?
Update: The actual Sowell quote about Socialism that I was too lazy to look up.
“Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it”
From majeot in the comments.