Venezuela, which has a socialist government, is in a terrible mess. It is in the news because a former minister wrote it should default on its debts. In principle it should be a rich country, since it has the the largest oil reserves in the world. But the government is mismanaging the economy. It controls prices, leading to shortages and waste. Venezuela has the cheapest gasoline in the world (here are some comparisons), but the government is unable to raise it.
So what does the government do? It does not pay its bills. It owes suppliers huge amounts and so medication, flights and other goods and services are in short supply. In effect, it has defaulted internally, by not paying its domestic bills. But it still pays interest on bonds, to avoid an outright default. Interestingly, it stopped publishing economic data. Too embarrassing.
As long as international investors are willing to lend to Venezuela, this can go on for some time. And in fact they do, but the cost is high: "The extra yield investors demand to own Venezuelan sovereign bonds instead of Treasuries jumped 2.99 percentage points in the past month to 13.39 percentage points"
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