Venezuela rationing energy… Go figure

Posted by Jason | Posted in Economics, Government | Posted on 13-01-2010


Another one bites the dust…..

The Venezuelan government, already facing power and water problems and a shaky economy, is including scheduled power outages nationwide as part of its ongoing electricity rationing efforts, the state-run news agency reported.

Electricity Minister Angel Rodriguez said the latest energy-saving measures are meant to prevent a power collapse that could occur if water levels in the Guri dam system continue to drop, the Bolivarian News Agency reported. Oil-rich Venezuela relies heavily on hydroelectric power, which has been hurt by drought.

Officials with the state electric utilities in Caracas, the capital, and two other western states today announced plans for four-hour outages every other day, the Associated Press reported.

Venezuela started the year with new government restrictions on power consumption, including a limit on the hours commercial centers may use the electricity grid.

via Venezuela expanding electricity rationing to include scheduled power outages nationwide | La Plaza | Los Angeles Times.

Gotta love socialism! Seriously, why did we elected a socialist again? And why do these idiots think we can make socialism work? Oh, that’s right, “Because we are Americans”. Even though we are all humans, the adjective American apparently means we can defy all historical evidence, economic science, and who knows maybe gravity.

This is what happens every time government is the decider of any economic matter. It does not matter what it is. In the US we are only prosperous to the point of which government isn’t involved in the economy. Our prosperity would be so much more if the government wasn’t involved at all, and it’s going to be so much less now that they have involved themselves so much more.

While I don’t have to say this for my regular readers, for all the new folks, the free market always allocates resources to their highest and best use. That is why you do not have shortages in something that your country has in abundance like you do in oil rich Venezuela. Anytime, and I mean anytime without exception, the government changes the way the free market functions, you get resources being allocated in a less useful way. The bottom line is that means the standard of living is decreased. Venezuela is a perfect example of standards of living being decreased by the government’s misallocation of resources. Now something as simple as energy is going to be rationed. If food rationing has started yet, it will be as will many other things. Producing and distributing of goods requires energy, so what do you think is going to happen now that energy is being rationed?

Considering how stupid governments are, I would not be surprised to see Venezuela reallocate resources to energy, and then have an abundance of energy. The only problem is because it will be centrally planned by an idiotic government (and they are all idiotic), they will have over allocated energy resources and some other resource(s) will be under allocated. This is what happens when a few people, far away from the actual transaction decide what transactions should be taking place months if not years in advance. Think about how inefficient that is. The free market on the other hand adjusts resource allocations by the second based on the constant tweaking of millions of individual transactions.

There is no doubt that America will be facing the same issues soon. Our government is centrally planning the cost of money, the housing market, the auto manufacturers, the banking industry, schooling, energy, the food supply, travel, health care and the list goes on and on. Instead of resources being steered by the end consumer and producer, Washington thinks they know who need what and how much of it they need. While we have been the frog in the increasingly hot water for probably the past 100 years, it seems Obama increasing rate of socialization has caused us to realize the waters boiling. Hopefully, we can stop it before we become Venezuela. Hopefully, the people of Venezuela realize their folly and revolt against their dictorial government. It’s their only hope, and not to far it the future it may be our only hope as well.

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