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How long until Chavez?s Venezuela has a melt down?
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ProfJohn
Lifer
Since Sweden is the socialist country du jour today I thought I?d share some facts on just how wonderful of a place it is.
Per capita GDP (PPP*) $29,926 or about 75% that of the US rate of $41,399 (Were 3rd highest in world.)
Public sector spending: 53% of GDP compared to 36% for the US
Unemployment rate: Things get interesting here. The Official number is 5.8% but that does not include the 2% in government unemployment figures, include them and you are sitting at nearly 8%. HOWEVER many claim the actual rate is between 15-20%. Google Sweden unemployment and start reading to see how much controversy there is over these figures.
Economic growth: 2.7% compared to US at 3.2%
It should be noted that Sweden moved away from some of its socialist trends in the 90s due to recession. And they are more similar to other European countries.
Also note that Sweden is a capitalist country with large private industries.
Where it is socialist is in its welfare state.
To pay for all this great stuff you just have to send over half your income to the government.
Must suck to be a single person in Sweden and know that half your income goes to pay for other people?s kids education, child care, medical costs, dental care etc.
Per capita GDP (PPP*) $29,926 or about 75% that of the US rate of $41,399 (Were 3rd highest in world.)
Public sector spending: 53% of GDP compared to 36% for the US
Unemployment rate: Things get interesting here. The Official number is 5.8% but that does not include the 2% in government unemployment figures, include them and you are sitting at nearly 8%. HOWEVER many claim the actual rate is between 15-20%. Google Sweden unemployment and start reading to see how much controversy there is over these figures.
Economic growth: 2.7% compared to US at 3.2%
It should be noted that Sweden moved away from some of its socialist trends in the 90s due to recession. And they are more similar to other European countries.
Also note that Sweden is a capitalist country with large private industries.
Where it is socialist is in its welfare state.
To pay for all this great stuff you just have to send over half your income to the government.
Must suck to be a single person in Sweden and know that half your income goes to pay for other people?s kids education, child care, medical costs, dental care etc.
zephyrprime
Diamond Member
Nuts. My earlier attempt to post was wiped out by firefox.
Anyway, it's important to look at what's happening in Venezuela because many textbook phenomena are happening there. First, the price controls are causing economic participants to exit the market. Rather than being able to find a mutually satisfactory price point for goods and services, people are opting to not commit transactions. Specifically, sellers are opting to retain their merchandise rather than sell at prices which would cause themselves harm. This is perfectly rational to do since it's better to die slowly than quickly. Since everyone is doing this, production is declining and that is causing real inflation due to existing monies being divided among a shrinking supply of products.
Next, I don't have proof of it but I am sure that Chavez is printing money like a Weimarian fool. Like so many people, he is making the mistake of thinking that money is a real thing when in fact, it is just a virtual thing.
Also, Chavez really has the personality of a classic tinpot populist dictator. I could see this coming a mile away and have said so on this forum before.
On the plus side, when all of this washed out eventually in a couple of years, it will be a great chance to buy venezuelian stock at depressed prices.
Anyway, it's important to look at what's happening in Venezuela because many textbook phenomena are happening there. First, the price controls are causing economic participants to exit the market. Rather than being able to find a mutually satisfactory price point for goods and services, people are opting to not commit transactions. Specifically, sellers are opting to retain their merchandise rather than sell at prices which would cause themselves harm. This is perfectly rational to do since it's better to die slowly than quickly. Since everyone is doing this, production is declining and that is causing real inflation due to existing monies being divided among a shrinking supply of products.
Next, I don't have proof of it but I am sure that Chavez is printing money like a Weimarian fool. Like so many people, he is making the mistake of thinking that money is a real thing when in fact, it is just a virtual thing.
Also, Chavez really has the personality of a classic tinpot populist dictator. I could see this coming a mile away and have said so on this forum before.
On the plus side, when all of this washed out eventually in a couple of years, it will be a great chance to buy venezuelian stock at depressed prices.
imported_Lothar
Diamond Member
China and India have a faster economic growth than the US.
I fail to see your logic...
If India and China have lower tax rates than the US, then by all means prove it.
imported_Lothar
Diamond Member
With regard to the entire Venezuela issue...
I don't know whether to laugh at Chavez or cry for the citizens that will be suffering under his idiotic policies.
I don't know whether to laugh at Chavez or cry for the citizens that will be suffering under his idiotic policies.
Considering India and China didn't have a real economy before capitalism, rate of economic growth is not a good metric. For instance, if in an immature economy, a poor man gets paid $0.05 cents an hour.. next year he gets paid $1/hr.. thats an increase of 2000%..
for a mature economy, economic growth is harder. Its like a wealthy man making $200/hr... and next year, he makes $220/hr... thats an increase of only 10%.. not really impressive.. But then would you rather be making $220/hr or $1/hr...
Yes, we are talking about raises. But it still wokrs the same for GDP... For a country that is 3rd world, or just coming out of the 3rd world.. any increase will likely lead to a higher rate change...
International Machine Consortium
Golden Member
I agree with you here.
Chavez is a fool who will be hoisted by his own petard, or more likely, the neck. Some other idiot dictator will take his place eventually.
Frankly though, he would have been voted out if not for Bush. People see him as a way to keep a thumb in the eye of an arrogant, abusive U.S. Take a look at their recent history. Chevez had lost a tremendous amount of support in the late 90s but enjoyed a resurgence after Bush got in and pissed off the entire globe (well, other than that idiot John Howard and the poodle).
International Machine Consortium
Golden Member
Except their education system, health care system, roads, cars, houses, gardens, etc are far more advanced than ours. So, the numbers may indicate one thing, the reality on the ground is that Scandinavia is far superior. No wasteful wars going on, no terror attacks on their soil. Where to stop? Given the opportunity, yes, I WOULD move there in an instant.
ProfJohn
Lifer
That is sort of a false argument because the US protects and insulates much of the world from having to worry about spending any money on defense.
Where would the price of oil be if the US was not there to kick Saddam out of Kuwait? And therefore where would the world economy be if oil was 50% higher than it is today? Etc etc.
The Europeans are able to live with very low defense spending because the US does all the work for them.
There is a term for this phenomenon it?s called the free rider problem.
It is essentially the same as social spending in the US though. 50% of America pays virtually no taxes. It is this 50% who are demanding more government programs, more health care spending, more education spending more more more. They demand more because they don?t feel the pinch when taxes go up to pay for all this spending.
Now if the US said ?screw you guys we?re going home? at the same time a nationalist leader decided to reestablish the Soviet empire you would see European defense spending go through the roof and their socialist utopia would fall apart.
BTW no one is stoping you from moving there, they need people since they aren't having enough babies themselves. I am sure they would love to have an intelligent person like yourself join them. 😉
Jaskalas
Lifer
This "event" is the non-aligned movement, an alliance consisting on North Korea, Iran, Venezuela, and Cuba. Probably their closest neighbors with involvement as well. It's an anti-us movement on a global scale.
Of course, I can understand your sympathies for global versions of your own feelings.
LegendKiller
Lifer
It's only doing well because personal debt it as at all-time high. Leveraging the future and then saying "Hey look, our economy is awesome because my CC's are all maxed out" is just stupid.
Furthermore, debt/GDP is about as piss-poor a measurement of economic health as the price of tea in china.
CPA
Elite Member
Probably because once there is a meltdown, Chavez or whoever is in office if the people smarten up, will go to the IMF begging for loans. Loans that are often made possible by the billions of dollars the US deposits into the IMF. Years later, people will forget how Chavez ran the country into the ground and then start criticizing the US and IMF for having the loans over the heads of Venezuelan poor people. The US will crater under global activist pressure and force the IMF to forgive the loans. And the cycle will begin again.
LegendKiller
Lifer
It all depends, is there a 1:1 ratio? Considering the savings rate is negative and the concentration of wealth is higher, I doubt that wealth accumulation has kept pace with debt accumulation.
I also question how much of that wealth is built upon false housing equity. Considering that the housing market is falling and will continue to fall, your benchmark is hardly sturdy.
Spouter of lies:
Wretched dictators are who the US put in charge of Venezuela in the past and would again if Chavez were out. Chavez was *legitimately elected*, and has strengthened democracy.
The deflier of freedom is you.
What's the first thing the US-allied new government did when it took Chavez out in a coup for a couple days? Abolished the congress and courts, and put back in economic repression to protect the wealthy class in Venezuela who protect the wealthy class in the US's investments there at the expense of the public.
Chavez is a huge improvement for the majority of Venezuelans, by the evidence I've seen, from their political power to their economic needs.
But you are an example of the ill-informed ideologues in the US who have no interest in the poor of Venezuela but get off mouthing your ideology and hating the people who the wealthy have demonized to protec their own interests, making yourself a tool for the few against the public. Your political activity would harm large numbers of innocent poor people.
Try to break out of your unthinking spouting for a moment and ask what you are really after. I know you almost certainly are not intentionally doing wrong to the poor there, but rather you are simply duped. What are you for - reducing poverty? Increasing democracy? Then look at the facts of Chavez compared to the situation under the previous regimes. You can get better informed.
Fern
Elite Member
That strikes me as the single most scary thing to possibly happen. He'll gut the country and ruin the single most important distribution system for taking product from field to market.Will farmers sell to the black market, or resort to bartering? Will they refuse to plant crops if the price is set below their production costs?
To hear talk of nationalizing grocery stores likely means servere problems in getting food to market and to people. To think the solution is to replace the middleman (the grocer) is absurd. Starvation of a nation is as good a reason for a coup as any other.
Fern
3chordcharlie
Diamond Member
Nope, I just figured I'd stick my head down there in the sand long enough to say something useful for all the Libertarians in the crowd.
See y'all if you ever come up for air!
Dissipate
Diamond Member
Your screeds against capitalism are not even worthy of a nod or honorable mention. Whose head is it that is really in the sand?
Your comment that what Hugo Chavez is doing in Venezuela is nothing more than a 'social experiment' while grocers are jailed and shut out of business and people can't get food to eat is indicative of how far your head is in the sand.
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