In early September of 2014, an op-ed by Ricardo Hausmann and Miguel Angel Santos set off a stampede of articles in the international press saying that Venezuela was on the brink of defaulting on its foreign bonds.  Contrary to what Bloomberg claims in this article today, Hausman did not merely say in that op-ed that Venezuela should default. He clearly questioned whether or not Venezuela would get through 2014 without being forced to default.

Huasmann’s infamous op-ed stated “Venezuela’s government needs to pay $5.2 billion in the first days of October. Will it? Does it have the cash on hand?“

He was saying that before oil prices dropped by about half over the following three months. Since that drop, oil prices have not come close to recovering the level they had in early September of 2014.

Quite simply, if Venezuela was on the brink of default in September of 2014  – as Hausmann and a slew of international journalists wanted people to believe – then the deep and sustained drop in oil prices should have forced Venezuela to default a long time ago.

Revealingly, in a debate between Hausmann and Venezuelan economist Francisco Rodriguez early in 2015, the whole issue of Venezuela defaulting was not even brought up until the last minutes of an hour and a half long debate. When it finally came up, Hausmann did not try to argue that Venezuela could not pay its foreign debts.

Now Hausmann has decided to become a bit bolder in the way he spreads default hype about Venezuela.  Unsurprisingly, Bloomberg uncritically regurgitates his prediction that Venezuela will be forced to default before the end of 2016. If Hausmann (and Bloomberg) were credible then that would have already have happened.

Mark Weisbrot offered the clearest and most concise explanation why nobody should be taken in by default hype.

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