The Age of Magic Money
Can Endless Spending Prevent Economic Calamity?
THE TICKING CLOCK
On December 6, 1998, Venezuelans stunned the world by electing as their president Hugo Chavez, a firebrand who six years earlier had sought to overthrow the country's long-standing democracy in a bloody but unsuccessful coup. Fifty-six percent of voters cast their ballots for the daring outsider and his promise to dislodge the thoroughly corrupt political elite. These hopeful citizens saw a political housecleaning as the way to halt the country's prolonged economic decline, restore growth, create employment, and overcome escalating social problems.
Chavez has made bold moves to overhaul politics, and for a while his actions seemed to justify his nation's hopes. In nearly three years, he has transformed Venezuela's political institutions and greatly weakened the old guard. In his first year in office, he engineered a new national constitution that significantly strengthened presidential powers. One revision, for example, allows the president to run for immediate reelection rather than