The Spending Binge in Comparative Perspective
Correction: As several commenters pointed out, this chart is badly misleading in this form, as it doesn’t adjust for inflation. A corrected version can be seen here.
We know the government always likes to pump lots of extra money out into the streets ahead of elections. But how’s the 2012 binge compare to the binges before recent elections?
The latest figures we have for Monetary Liquidity (M2 – for non-nerds, the total number of bolivars sloshing around in the economy) are from the week of August 24th – seven weeks before the election. At that point, liquidity was 51% higher than it had been 45 weeks earlier (that is, 52 weeks before the election.)
Only the 2006 liquidity splurge comes close: even so, 7 weeks ahead of the 2006 presidential election, liquidity was just 43% higher than it had been 45 weeks earlier. As for 2007, when we defeated the government in the Constitutional Reform Referendum, liquidity had grown just 18% that year at a comparable stage in the race.
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