Venezuela Refuses to Default, and Few People Seem to Understand Why
If Venezuela defaulted on foreign debts, it will be very difficult (and/or expensive) to borrow again in the future.Venezuela is essentially hedging their situation is temporary (however temporary, temporary is), and having a good economic standing in the future may depend heavily on foreign investments (particularly since Venezuela is a petroleum based economy).Burning those bridges now could cripple Venezuela permanently.The same question could be posed of any nation with impoverished citizens and foreign debts. We could even examine the USA, which has never defaulted, even during the height of the Great Depression.Choosing to default on those debts and instead send temporary (and likely insignificant, once the bureaucracy runs it's course) aid to some citizens jeopardizes the entire nation. Simply put, the trade-off is not worth it.