Cuba runs out of other people's money
Must suck to have to admit you have been so wrong after 55 years of communist failure.
From
Breitbart/AFP:
Cuba eyes more self-employment as massive layoffs loom
President Raul Castro expanded self-employment fields on Sunday, ahead of looming government plans to slash as many as one million jobs -- 20 percent of communist Cuba's work force -- from state payrolls.
The economy, 95 percent of which is currently in state hands, does not have the ability to absorb such vast numbers of jobless. Castro's move aims to try to reduce the socioeconomic fallout, but it will be an uphill battle.
The Council of Ministers "agreed to expand the range of self-employment jobs, and their use as another alternative for workers who lose their jobs," Castro said as he gave a closing address at one of two annual sessions of the National Assembly.
After the crash of the former Soviet bloc, Cuba's cash-strapped government in the 1990s approved a wide range of self-employment. Positions such as beauticians, dog groomers, small restaurant owners and even lighter refillers were legalized as long as workers got licenses and paid taxes.
But social resentment emerged as an issue when some workers, particularly in small private restaurants, achieved dramatic levels of success.
The government began increasing taxation and regulation, and decreasing license-granting, until the self-employed sector was largely rendered paralyzed, like the rest of the economy.
Cuba has no regular access to international funding; it depends heavily on the cut-rate oil it gets from Venezuela in order to keep its fragile economy afloat. Tourism earnings and remittances from emigres also are key pillars of the Cuban economy.
Got to love that bit about:
Positions such as beauticians, dog groomers, small restaurant owners and even lighter refillers were legalized as long as workers got licenses and paid taxes.
and then, big surprise:
when some workers, particularly in small private restaurants, achieved dramatic levels of success
so the pure socialist government's response was:
government began increasing taxation and regulation, and decreasing license-granting, until the self-employed sector was largely rendered paralyzed
This is Economics 101 -- this is not rocket science and it shows up in culture after culture. It has been tried before and has failed every single time. Cuba has 90% of the economy locked into its government and 10% in public hands. Cuba has failed economically.
The United States is hurtling toward the edge of the Abyss while other nations have looked into its depths and are retreating.
Posted by DaveH at August 2, 2010 8:31 AM