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    I've been following events in Venezuela recently. Due to economic mismanagement and the recent crash in oil prices the country has been utterly crippled, the economy is in free fall. Venezuela recently made a debt payment of around $1.5 billion to creditors, it seems likely it will soon be unable to meet those payments, as well as its domestic economic demands.

    Which raises the question of at what point should a government put the well being of its citizens beyond that of international creditors, I am thinking of Greece here as well.

    Or should the long term financial viability of a state always be put first, democratic demands be ignored so a state does not lose its credibility and be completely unable to raise finance? Neither are attractive options, but realistically which should be put first, the people or creditors and the long term economy?
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    (Original post by Aj12)
    I've been following events in Venezuela recently. Due to economic mismanagement and the recent crash in oil prices the country has been utterly crippled, the economy is in free fall. Venezuela recently made a debt payment of around $1.5 billion to creditors, it seems likely it will soon be unable to meet those payments, as well as its domestic economic demands.

    Which raises the question of at what point should a government put the well being of its citizens beyond that of international creditors, I am thinking of Greece here as well.

    Or should the long term financial viability of a state always be put first, democratic demands be ignored so a state does not lose its credibility and be completely unable to raise finance? Neither are attractive options, but realistically which should be put first, the people or creditors and the long term economy?
    With lack of investment and major cuts everywhere and even MORE to come I don't know how we going to get out of this.
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    Within reason.
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    A lack of economy trickles down to the people eventually. I would try to keep a balance, but honestly, tilt more in the favour of economy/credit
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    This really depends on who will submit to debt restructuring and how much wealth you have domestically versus being dependent on exports.
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    (Original post by Aj12)
    I've been following events in Venezuela recently. Due to economic mismanagement and the recent crash in oil prices the country has been utterly crippled, the economy is in free fall. Venezuela recently made a debt payment of around $1.5 billion to creditors, it seems likely it will soon be unable to meet those payments, as well as its domestic economic demands.

    Which raises the question of at what point should a government put the well being of its citizens beyond that of international creditors, I am thinking of Greece here as well.

    Or should the long term financial viability of a state always be put first, democratic demands be ignored so a state does not lose its credibility and be completely unable to raise finance? Neither are attractive options, but realistically which should be put first, the people or creditors and the long term economy?
    It's a balancing act which is different in different nations.

    All nations need access to credit so they must balance it instead of outright defaulting.


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    Financial viability is important for citizens' well-being. You can't really have one without the other, if your country goes bankrupt it makes buying imports incredibly tricky. All of a sudden you can't keep hospitals stocked with medicine. Shops get emptied out. Utilities grind to a halt. And so on. And as I understand it Venezuela in particular has enough problems with this already, as their credit rating is pretty much rock-bottom.

    I suppose there may end up being a tipping point where the country ends up so fiscally screwed that there's actually no point in even trying to repay its debts, that is unless they can buck the trend and start improving their economy again. But I guess that won't be happening with current oil prices.
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    (Original post by Dez)
    Financial viability is important for citizens' well-being. You can't really have one without the other, if your country goes bankrupt it makes buying imports incredibly tricky. All of a sudden you can't keep hospitals stocked with medicine. Shops get emptied out. Utilities grind to a halt. And so on. And as I understand it Venezuela in particular has enough problems with this already, as their credit rating is pretty much rock-bottom.

    I suppose there may end up being a tipping point where the country ends up so fiscally screwed that there's actually no point in even trying to repay its debts, that is unless they can buck the trend and start improving their economy again. But I guess that won't be happening with current oil prices.
    This.
 
 
 
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