The end game of government subsidies

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One of the 'softer' forms of socialism is government subsidized staples - food, shelter, energy, etc... People come to accept these as their right and when the inevitable economic perturbations happen and these get taken away, the thin veneer of society crumbles. Look at Venezuela to see the end game of government gimmies. The same thing is playing out in Egypt as well - from The New York Times:

Sweet-Toothed Egypt Endures a Sugar Crisis: ‘People Are Going to Snap’
Egyptians pile sugar into mugs of tea by the spoonful — or three or five. A staple long subsidized by the government for most of the population, sugar is the chief ingredient of the national pudding, Om Ali. It can feel like the only ingredient. It is also a prime reason that nearly a fifth of Egyptians have diabetes.

So a weekslong sugar shortage has plunged people into a panic. The sugar crisis, as it is known, has quickly become shorthand for the brewing anger against President Abdel Fattah el-Sisi’s management of the economy and his overall rule.

“The people are going to snap,” Ahmad el-Gebaly said as he turned away customers seeking sugar he did not have at his subsidized-goods store in Bulaq, a working-class neighborhood of Cairo.

“Nobody can stand him anymore,” he added of Mr. Sisi. “Sugar is like rice and oil and wheat. You can never run out of it. You can never mess with it. Who can live without sugar?”

Still reeling from the political turbulence and militant attacks that followed the 2011 uprising, Egypt’s economy is in free fall. Its pound is now worth 6 cents on the black market, about half its value a year ago.

Tourism has collapsed, remittances from Egyptian workers in the Persian Gulf have dropped and revenue from the Suez Canal has fallen. Inflation reached a seven-year high of 15.5 percent in August. Saudi Arabia delayed a shipment of discount petroleum products this month, setting off fears of a deteriorating relationship with an ally that has propped up Egypt with more than $25 billion since Mr. Sisi came to power in 2014.

Sugar is not the only scarce staple, as the plummeting pound has slashed Egypt’s import-purchasing power. Cooking oil disappeared from shelves for a time this year, residents said, as did baby formula, and rice is in low supply. Some people complained that they could not find certain medicines, or that the prices had skyrocketed.

They have sugar, it is just priced at the world market and when you use the government to fix the price, supplies will run out as people hoard. Tourism used to be a major revenue stream but their failure to condemn islamic terrorism has caused that to dry up to a trickle.

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