| | Inflation can itself create shortages, as people buy more now in order to avoid having to pay higher prices in the future. Price caps simply add insult to injury by creating even greater shortages. What a circus!
Price controls are the last thing you want to do to control inflation, and it doesn't work anyway. The only thing that works is controlling the money supply. President Nixon imposed wage and price controls back in 1971 in order to curb inflation, which was 4% at the time. The wage and price controls were mostly dismantled by April, 1974, because it was recognized that they were a complete failure. By that time, the U.S. inflation rate had reached double digits.
Chavez is an economic ignoramus as well an arrogant dictator who is rapidly destroying Venezuela's economy.
|
|
