Venezuela Denying Food Aid to Opponents, Stealing Toys for Christmas, Introducing 20,000-Bolivar Note Worth $5


Superintendencia de Precios Justos

Venezuela continues to suffer from a self-inflicted economic crisis thanks to its socialist government. Local committees of supply and demand (CLAPs) the government set up this summer to "create a system of distribution that is for the people and autonomous for the people" have, just as opponents predicted, become another method for the socialist government to reward its supporters while further sabotaging the economy.

Venezuelans who don't identify as chavistas, or government loyalists, say they are denied deliveries of CLAPs grocery bags, which are distributed in poor neighborhoods, the Washington Post reports. "The goal of the CLAPs is to administer hunger," opposition leader Jesus Torrealba said in a weekly radio show, according to the Post, and the Venezuelan ministry of food itself admits the CLAPs program is administered by various self-identified pro-government groups. Venezuela's vice president called the program a "political instrument to defend the revolution" and one state governor admitted he didn't want to see opponents of the government to use the program.

Venezuela's president, Nicolas Maduro, claims his opponents are waging an "economic war" against him, but his government, through CLAPs and other economically illiterate and destructive policies, is actually waging an economic war on its people.

Last week, the Venezuelan government seized four million toys from a toy distributor the national superintendent for the defense of socioeconomic rights accused of hoarding the toys. The superintendent's office called the toys part of an "arsenal used by the company in the economic war against the people, without regard to the individual rights of the boys and girls of the country." But as Tim Worstall explains in Forbes, hoarding doesn't make sense in hyperinflationary environments, because Venezuelan companies have to pay the Venezuelan corporate tax on profits irrespective of the effect of hyperinflation. The toys will be distributed for sale at sharp discounts, according to NPR, and through the local CLAPs.

Inflation in Venezuela this year is estimated at upward of 500 percent. This week the government announced it was pulling the 100-bolivar bill out of circulation. The bill accounts for 48 percent of all bills and coins in circulation, according to Fortune. The bill was worth about two cents on the street. The government is rolling out three new bills, the largest of which, a 20,000-bolivar note, will be worth less than $5. Some Venezuelans have turned to bitcoin, as Jim Epstein reported in the January issue of Reason.

Watch Reason TV's 3 Ways Bitcoin is Promoting Freedom in Latin America: