NEWLY installed Prime Minister Andy Burnham is embarking on a whistlestop tour of the UK in a frantic attempt to ‘reconnect’ with workers across the country and convince them that his Labour government is really on their side and determined to ‘fix’ the cost-of-living crisis.
So far, all Burnham has come up with are plans to close down vape shops and bookies on the high street, along with removing VAT from domestic electricity bills, estimated to save the average household a derisory £3.75 a month.
While Burnham travels around the country desperately trying to convince the working class that closing down vape shops will regenerate the UK economy, the reality is that British capitalism is crashing under a debt mountain.
Last week the UK national debt broke the historic £3 trillion mark.
The interest paid by the UK government to the hedge funds and financial speculators, who buy up this debt, comes to over £120 billion a year, as they demand higher interest rates.
These speculators buying up the UK’s national debt, using highly leveraged debt to do so, are demanding the stability promised them by the previous Starmer administration, namely a Labour government that would cut the massive spending on the NHS and social services to bring down the national debt.
Starmer, in the face of overwhelming opposition from the working class, failed, and now it’s Burnham’s turn to try to convince the working class to accept the destruction of all the gains of the Welfare State to satisfy the capitalist financial world.
Burnham is not the only world leader facing the prospect of a massive financial crisis.
The United States is being engulfed by a massive national debt that has reached $39.68 trillion, with the debt to GDP (the total economic output of the US) ratio approximately 123%.
Apparently, the US Treasury has to roll over $6tn of debt every three months in an increasingly sceptical market, as well as issuing $2tn of new debt annually to cover the worst structural deficit in US peacetime history. According to Ambrose Evans-Pritchard of the Daily Telegraph: ‘The ingredients are coming together for a US financial crisis’.
The US debt historically has been bought up by foreign countries and large financial institutions eager to park their money in the safe haven of the most powerful capitalist nation in the world.
This has ended because the US is no longer regarded as a ‘safe’ place, and countries have been steadily selling off US bonds, with hedge funds doubling their share of the US debt against using money borrowed on the international money markets, and determined to extract huge returns in interest repayments.
These hedge funds will dump financing the unrepayable US debt as fast as they will dump the UK’s.
Ambrose-Pritchard writes: ‘It takes a serious trigger to detonate a crisis of financial confidence in a great power with deep economic strengths and a world reserve currency’ adding: ‘Military overstretch is usually to blame’.
US imperialism has certainly ‘overstretched’ itself in the unprovoked war against Iran, that has cost the US over $1 trillion to date, according to estimates for a war that ‘has shown the US to be a weaker military power than we all thought.’
Capitalism internationally has hit the end of the road.
The attempt by the US to assert its domination over the world through wars has rebounded, driving a financial and economic crash that will take the entire world capitalist economy down, with the working class expected to pay the cost.
However, the working class has the power to resolve this crisis by putting an end to capitalism once and for all.
This means workers in the US, UK and Europe forcing their trade unions to act by calling general strikes to bring down their capitalist governments and replacing them with workers governments and socialism.
Join the WRP and Young Socialists, build sections of the International Committee of the Fourth International in every country to provide the leadership required for the victory of the world socialist revolution.
