THE news last week that more than 100 cities in the United States are set to go bankrupt in the new year spells complete disaster for the world’s largest capitalist economy.
Cities and states in the US owe a staggering $2 trillion, and financial analysts are saying quite bluntly that with debt repayments far outstripping income from local taxes these cities and states will simply go bust and be unable to provide even basic facilities for their inhabitants.
These cities are now joining states like California and Arizona that are unable to make repayment on the huge debts they have incurred.
In Detroit, home of the once mighty, now collapsed US motor industry, workers and the unemployed are forced to survive by returning to pre-industrial practices of growing their own food on waste land.
This fresh wave of bankruptcies will send the US economy even further into slump.
Municipal bankruptcy is not confined to the United States.
In Europe, cities like Barcelona, Florence, Madrid and Budapest are being earmarked by the credit rating agencies as bust, with the total borrowing by European local and regional government reaching an all-time high of £1.1 trillion.
In Britain, the savage cuts to council funding by the Tory-led coalition will result in the same medicine being dished out.
Massive cuts in public expenditure are leading to hundreds of thousands of jobs going and public services being closed down on a scale never seen before.
Municipal bankruptcy is now joining state bankruptcy, with countries like Ireland, Spain, Portugal and Italy all on the brink of openly going under, and with Britain, Belgium and France rapidly following.
Such is the international nature of the crisis that every capitalist nation in the world faces the same future – a massive sharpening of the class struggle as the ruling class attempts to dump the crisis onto the working class and middle classes.
It is a crisis centred on the US, the most powerful capitalist nation in the world, but which stretches to every corner of the globe, from the decaying former imperialist nations of Europe through to the ex-colonial nations of Africa, South America, the Middle East and Asia.
The crisis is producing trade and currency wars as American imperialism seeks to alleviate its catastrophic economic crash at the expense of its rivals in the capitalist world, and the degenerate and deformed workers’ states of the Soviet Union and China.
These trade/currency wars will certainly be transformed into shooting wars in the coming period, such is the desperation of the imperialists.
The inexorable drive by world capitalism to make the working class pay for this crisis is producing a revolutionary unity of the working class internationally.
In Greece, the Prime Minister, Yiorghis Papandreou openly admitted that the government’s cuts had produced a situation of ‘class war’ as workers took to the streets in general strike action.
The same story is repeated throughout with countries like Portugal witnessing the first general strike in decades.
In Britain, the drive towards a general strike is becoming unstoppable as workers, inspired by the fight of students and young people against the destruction of education and jobs, demand action to fight the coalition government and its intent to drive the working class back to 19th century conditions.
These spontaneous movements of the working class are enormously powerful, but history has taught us the harsh lesson that without a conscious revolutionary leadership even the most powerful movement cannot succeed in putting an end to capitalism.
The urgent task of the hour is to build the sections of the International Committee of the Fourth International throughout the world, to lead the developing world socialist revolution to its victory, putting an end to capitalism and imperialism and taking humanity forward to socialism.