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Comment by tim333 | Hacker News Reader

If they just changed the law so you could exchange bolivars at whatever rate you wanted and dropped import restrictions so you could import/export what you wanted and dropped price controls and subsidies a fair chunk of their problems would go overnight. Instead more weird disfunction seems to be continuing.

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They would also have to return expropriated companies (at least in the food sector) and farms to their rightful owners.

None of that would make up for all the lost equipment (to theft, to disuse, to misuse, to lack of maintenance). Nor would any of that encourage new investment (how can you trust that the government won't go back to its old bad ways?). Nor would it bring back all the population that has left for Colombia, Ecuador, and Brazil.

But all of what you said and all of what I listed, together, would be a good start. It would also help a great deal to abandon all the violent rhetoric, allow truly free and fair elections, allow the opposition to win when they do, and so on and so forth.

Argentina did all of what you said (well, they still have some subsidies), and it wasn't quite enough by itself. The primary budget deficit is still very large and the immediate driver of inflation there.

Large welfare state + underdeveloped economy + expropriation == no trust/confidence. Or, how to destroy your country in just a few steps and a just few years.

Eh, "have to" is way too strong. If anything, simply stopping fucking things up more would allow for a lot of economic growth in a way that isn't nearly as heavy a lift as reversing everything that's happened in the past decade.

Argentina has unfortunately not changed is monetary emision rates even though they claim to have chanced monetary policy. Argentina is headed for disaster because precisely, it admires Venezuela.

Well, no, the current Argentine government decidedly does not admire Venezuela's model (the preceding government did admire Chavez/Maduro). Their problem is that to rein in inflation they must cut the welfare state way down, including a variety of subsidies (electric, ...). Removing those subsidies is known there as a "tarifazo", which means "massive rate increase", and has caused previous governments to fall, which is why the current government is so scared to do it.

Macri's government hopes that they can slowly adjust things rather than go the shock therapy route -- if all goes well, it could work, but both approaches are risky, and it could all end badly again either way.

That’s the narrative but the results show still rampant inflation, still high government spending, and same monetary base expansion. The current government is economically very similar to the previous, and substituted hiperinflation with external debt

I mean, the Macri government is clearly not at all like the Fernandez government. The problems you list are real, and they are making mistakes as they always do, but the Fernandez govt really did want to go the way of Venezuela. The Macri government just doesn't have the oomph to push through the reforms they want -- whether for lack of seats in the congress or lack of conviction or fear of a repeat of 2001, I don't know.

That would make some key stakeholders (in the military and govt) quite unhappy, leading to difficulties staying in control, leading to prison or worse for the top. It's gotten to the point that they need to cling to power.

It got to that point years ago.

People are complaining about price controls being relaxed (a bit) on fuel, too. Look at this[1]:

> Mr. Maduro hasn’t specified when gasoline prices may start rising. Some of his detractors have started to call his plan a “neoliberal” austerity package that undermines the socialist ideology long espoused by his ruling party.

I'm not sure the people would stand for what's needed to fix the problem -- they know they don't want the country in the destroyed state it's in, but I'm not sure they're all on the same page on what's needed to fix it aside from "less corruption please".

For the suggestions in the top-level comments that might just apply to subsidies, though. I'm sure allowing imports, exports (and international aid...) would be broadly popular.

1: https://www.wsj.com/articles/venezuela-devalues-currency-and...

No, entirely not. What would happen overnight is that the currency would plummet against all other currencies into Deuschemark territory, at which point there is no import/export possible with that currency. This is not a simple problem to get oneself out of, dear random internet commenter, which is why you don't want to get into it in the first place. The spread between the official rate and the black market rate already reflects a shred of the drop that would occur if the currency floats.

The black market rate is the floating exchange rate. There isn't really much of an actual non-floating exchange going on. Forced black market trading makes the currency less valuable.

Yes, that was precisely my point. But there is a limit to how much currency can be floated on the black market. I was replying to someone who thought floating all of it would be a good idea.

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