Bad economic strategies

Today, impotence leads me to let off steam by this means to talk a little about the current situation of the country. Perhaps many of you have read about the recent economic measures being implemented by the national government with wage increases, the delivery of bonuses and the new monetary cone. It really seems like a good strategy and if you listen to someone saying that it is bad you will think that it is incomprehensible since many think that the main problem of Venezuelans is the low purchasing power. In part this is true, but the solution to the problem is not to increase purchasing power, but rather production.

The reason for the high prices in the country is mainly due to a government strategy that by 2014 forced all stores to lower their prices in such a way that the seller lost money by doing so, by lowering store prices logically increases the purchasing power of everyone, however people bought everything they could end up with the existing merchandise which caused a shortage of products and when they appeared again in the market it was already very difficult to acquire them. The solution is not to increase purchasing power but to increase production.

I remember that by 2014 I couldn't say if my salary was good or bad, if I had good purchasing power or not. The reason was that there was no product to buy, it was frustrating to have money but not have to eat at home, I went out to make market and returned home with the same amount of money, I even wondered if it was worth having money where there was nothing to buy. The solution is not to increase purchasing power, but to increase production.

According to my own analysis, inflation has occurred because production was reduced and at the same time purchasing power was increased, generating greater demand; according to the supply-demand relationship, it was obvious that prices had to shoot up. Since then the government has been expropriating private companies which it has not been able to produce.

Today I have witnessed again a phenomenon similar to that of 2013, the new strategy of the government is very similar to the previous one, is forcing traders to sell their products at loss-making prices, at the same time has given bonuses to the population increasing their purchasing power so they can buy these products. This is good for the short-term families who go and finish all the existing merchandise in the supermarkets as they have indeed done today. But in the long term the trader is left without investment capital and out of indignation decides to close his business, in the long term we will obtain the same scarcity and the cycle of supply-demand inflation will be repeated because the solution is not to increase purchasing power but production.

Following the supply-demand logic, instead of the government giving away money should teach us to earn it with work that helps increase production, an increase in production is an increase in supply to supply demand and when supply increases prices go down and is the right way to do it without causing the chaos that we are living today. I hope the government can think a little bit about this to do things the best way since we have been tortured for a long time and in different ways that I think we deserve a break.

Thank you for reading!