Last December the Cuban government announced a “macroeconomic stabilization plan” that increases taxes and the prices for basic products monopolized by the state (fuels, electricity, water, transportation) that presumably will help the State balance its books and reduce inflation.[1]
Barbara Cruz, a Cuban commentator, points out at least the following fallacies in this plan:
- First, it is morally wrong for a government that calls itself “socialist” to support the interests of the weakest when the plan excludes the marginally poorer people from the market while concentrating demand in the wealthiest people.
- Second, it falsely assumes that future global demand for various products will decrease and thereby reduce future global prices.
- Third, Cubans do not have the capacity to save because they already have reduced their spending as much as they can.
Therefore, the only way out of this horrible situation for the Cuban government is to force another wave of Cuban emigrants who will increase remittances to their families on the island. In other words, “the new ideal of an old Revolution” is “a country of tired old people maintained from Miami.” [2]
Already Cuba has seen the fiscal calculation of the dollar go from 24X1 to 120X1, thereby increasing the cost of imports from 2,400 pesos to 6,000 pesos. This is part of “the deadly cocktail” of hyperinflation.
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[1] Cruz, Castroism is forcing another migratory stampede, Diario de Cuba (Jan. 22, 2024).
[2] Cruz, The hyperinflationary cocktail that Castroism is mixing for Cuba, Diario de Cuba (Jan. 24, 2024).