Socialism! Venezuela’s 500,000% Inflation

Venezuela Admits Their Economy Failed - Then Embraces More Socialism

America suffered its worst streak of inflation in modern history from the 1970s until the early ’80s when inflation regularly topped 10% per year.

The effects were catastrophic for the economy. High inflation pushed interest on loans past 20%, making it hard for homeowners to buy, and prospective entrepreneurs to lend. The stock market lost 40% during a crash in the early 70s, and unemployment continued to rise until it surpassed 10%.

Over the past decade, official inflation has been minuscule; only around 2% in most years, so it’s hard for us to imagine what 10% inflation would look like. For some perspective, prices double roughly every 35 years at 2% inflation, but every 7 years at 10% inflation.

No comparison, however, can put Venezuela’s socialist-induced inflation, and resulting economic wreckage, in perspective.

According to the Daily Wire: “five million Venezuelan Bolivars is equivalent to $1.45 in United States dollars, which is approximately the same amount that a minimum-wage worker earns in an entire month in Venezuela.”

A cup of coffee costs approximately one million Bolivars. As of August of last year, the smallest unit of currency in the online video game World of Warcraft traded for a higher value on the black market than a Bolivar, and the gap in value between the two increases by the second.

Bloomberg News noted that “just two years ago when we launched the Bloomberg Cafe Con Leche Index, a coffee cost 450 Bolivars. With the latest price increase — from 800,000 Bolivars just a week earlier — inflation over the past 12 months in Venezuela climbed to 43,378 percent, according to the index.”

Here that is, charted:

According to Bloomberg, if we use the inflation rate over the last three months to project the inflation rate over the next year, it comes out to a staggering 482,153%.

Venezuela’s socialist government is going through the inevitable collapse that every socialist government will suffer. And as the socialists in charge continued to drive down the road to economic hell, American liberals not only cheered them on every step of the way but as recently as last week, nominated a socialist for Congress. (RELATED: Why Are Liberals Silent About Venezuela’s Socialist Nightmare?).

In 2013, liberal pundit David Sirota praised Venezuela’s socialist “success,” running an article headlined “Hugo Chavez’s Economic Miracle.” Famed leftist Noam Chomsky also supported the Chavez regime, particularly its anti-Americanism, believing that Chavez brought forward the “historic liberation of Latin America” and proved “destructive to the rich oligarchy.”

And Michael Moore still hasn’t deleted this gem:

Five years after Moore’s tweet, poverty in Venezuela tops 90%.

And most depressing of all? The facts don’t matter for voters. A poll of Democratic primary voters by the American Action Network found that when capitalism and socialism were polled head to head, socialism won by 15 percentage points, with just 25 percent of respondents saying they favored capitalism. Phrased differently, only 1 in 4 Democrats believes that capitalism is the best economic system. Other polls show that over half of millennials identify as socialist (though most struggle to accurately define it).

Even Hillary Clinton had to acknowledge that the socialist crazies in her party probably cost her the election (though in all fairness, she’s blamed a million other things for her loss).

For as dim as they’ve already been, the Democratic Party’s brightest days are long behind them.

One shouldn’t be surprised that the socialism experiment has once again failed. Unfortunately, the people of Venezuela are the ones who truly suffer under this tragic economic model.

By Matt

Matt is the co-founder of Unbiased America and a freelance writer specializing in economics and politics. He’s been published... More about Matt

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