Venezuela Staggers Toward Default

Recently, Venezuela was the wealthiest country in South America, largely because it is afloat on a sea of black gold. Then came socialism. Now it demonstrates why you do not lend money to socialists:

On Monday Caracas missed interest payments due on two government bonds and one bond issued by the state-owned oil monopoly known by its Spanish initials PdVSA. Venezuela owed creditors $280 million, which it couldn’t manage even after a 30-day grace period.

Venezuela can’t pay its debts because it is broke. Here’s where all the money went:

[I]n 2005 the socialist Hugo Chávez declared that the central bank had “excessive reserves.” He mandated that the executive take the excess from the bank without compensation. Today the central bank has at best $1 billion in reserves.

Remember when Barack Obama proclaimed that “at a certain point you’ve made enough money”? Venezuela presents the results of letting ham-fisted ideologues determine what is enough money.

Faced with expropriation, hyperinflation, price controls and rampant corruption, human and monetary capital has fled Venezuela.

The country has not been officially declared in default, but it won’t be long. Restructuring the debt won’t work, because it requires the economy to grow again, which will never happen with Big Government affixed to it like a facehugger from the Alien movies.

Venezuela is what Bernie Sanders supporters want to reduce America to. They are becoming the base of the radicalized Democrat Party.

On a tip from Bodhisattva.