America Must Learn from Venezuela Insolvency Damage

Mo Brooks Floor Speech: America Must Learn from Venezuela Insolvency Damage

March 15, 2016

U.S. House Floor

Mr. Speaker, America has led the world culturally, scientifically, militarily, in freedom, and in many other ways.  But if America does not stop its overspending and binge borrowing, then we are doomed to follow the footsteps of countries that chose to be financially irresponsible, and are condemned to suffer the same dire consequences.  America need not speculate on our fate; rather, America must learn from “bad example” countries such as Venezuela, a socialist country that has already walked the financially irresponsible path America unfortunately is on.

Venezuela suffered the world’s highest inflation rate, at 275%, in 2015.[1]  According to the International Monetary Fund, Venezuela’s 2016 inflation rate will be 720%.[2]  Compare that to America, where 3 to 5% inflation causes concern.  To put Venezuela’s inflation rate in everyday terms, let’s apply it to things we buy:  If a gallon of milk costs you $3 today, it will cost $21 a year from now.  If a pound of ground beef costs you $4 today, it will cost you $28 a year from now.  A new car that costs you $25,000 today will cost you $175,000 a year from now.  But the damage, and danger, does not end with hyperinflation.

The IMF reports Venezuela is experiencing “widespread shortages of essential goods—including food—exacting a tragic toll.”[3]

Grocery stores have rows and rows of empty shelves.[4]  Venezuelans can’t find food to feed their families and form long lines outside of stores, hoping to buy whatever is in stock, from sugar to shampoo.[5]  In response, socialist President Madura has ordered police to limit consumers to two shopping days per week at government-owned food stores.[6]  One frustrated Venezuelan shopper noted, “It’s exasperating, but it’s the only way to get food in Venezuela.”[7]

Inflation and food shortages are only the tip of the iceberg.  When supplies run out, when jobs can’t be found, violence erupts.  In just one month in 2014, violent street riots killed 43 Venezuelans,[8] blocking citizens from accessing food, transportation, and medical services.[9]  Occupied buildings were torched, injuring hundreds.[10]

Venezuela is now one of the most violent countries in the world, with a chilling 82 homicides per 100,000 population[11] (roughly twenty times worse than America’s homicide rate).[12]  Caracas, Venezuela’s capital, is the world’s most violent city, with a war zone like 120 murders per 100,000 citizens.[13]

Venezuela’s insolvency has forced it to slash defense spending by 34%, putting Venezuela citizens at even more heightened risk of loss of life.[14]  Venezuela’s tragedy is not because it is a resource poor country.  To the contrary, Venezuela has more proven oil reserves than any country on earth — even more than the entire oil-rich North American continent.[15] 

Venezuela’s collapse is because of two things.  First, Venezuela decided to experiment with socialism, an economic model that has failed every country that has tried it.  Second, Venezuela’s politicians were seduced by the lure of out-of-control spending financed by more borrowing and higher debt – the same temptation Washington politicians have succumbed to for decades.  America must learn from Venezuela and every other country that has been financially irresponsible. 

Mr. Speaker, time is running out.  Washington must balance the budget before America’s debt burden spirals out of control.  America cannot wait until our financial crisis is lost and it is too late to prevent the debilitating insolvency and bankruptcy that await us.  I pray the American people will be good stewards of our Republic in 2016 and elect Washington officials who both understand the threat posed by deficits and debt and have the backbone to fix it.  America’s future depends on it!      

##