"The problem in Venezuela is not that socialism has been poorly implemented but that socialism has been faithfully implemented. From the Soviet Union to Cuba, Venezuela — wherever socialism or communism has been adopted, it has delivered anguish, devastation and failure."

President Trump

If Socialism Is the Problem in Venezuela, More Sanctions Are Not the Solution

More could be done, of course, but to what end? More sanctions on more of Maduro’s people has been suggested, along with criminal investigations into Maduro’s theft of $10 million from the country’s treasury and ties to the illicit drug industry by some of his top military people. Those investigations could extend to the widespread corrupt food import scheme that has left nearly the entire country starving. But again, to what end? As Michael Shifter, president of the 

Washington-based think tank Inter-American Dialogue, observed: “There is no sign [the present sanctions] are succeeding in the way that the U.S. had hoped.” 

Socialism sows the seeds of its own destruction. Its deliberate murder of the free market through price controls has reduced the regime’s cash flow to the point where it must either borrow from abroad, or print new money. Venezuela has been doing both. Inflation is estimated to approach 2,000 percent this year, rendering the country’s bolivar currency essentially worthless. And it has borrowed an estimated $150 billion from lenders including China and Russia. 

Now those seeds are sprouting: Maduro’s government has drained its cash reserves but owes its lenders $5 billion in principal and interest before the end of the year. Despite the $1 billion a month flowing into PDVSA, Maduro’s state-owned oil company, from American refiners (one area which the Trump regime has been reluctant to sanction), 

it’s mathematics that will sink Maduro, and accomplish Trump’s objective without firing a shot or adding one more Maduro crony to his sanctions list. Defaults will lead to seizures of his oil company’s assets, thus ending his regime through financial asphyxiation. 

Venezuela sits atop the world’s largest proven oil reserves. A new regime, managed carefully and prudently, using tried-and-true free-market principles (i.e., rule of law, support of private property and contracts, government limited to its proper role, etc.) would return Venezuela to its rightful position as the leading economic powerhouse it once was prior to the arrival of Marxists Hugo Chávez and his protégé Nicolas Maduro.

 DYI: 

The collapse will occur what will be telling is how the Russians and/or China respond when they seize Venezuela’s oil assets due to default.  There is a possibility that either one or both decides to colonize the country and strip it economically bare.  Of course with one or two foreign powers in South America is in direct confrontation of the Monroe Doctrine that is defined; as a principle of US policy, originated by President James Monroe in 1823, that any intervention by external powers in the politics of the Americas is a potentially hostile act against the US.

DYI