ON Monday, President Obama addressed the prospect of the USA going bust saying: ‘So to even entertain the idea of this happening – of the United States of America not paying its bills – is irresponsible. It’s absurd. As the Speaker said two years ago, it would be – and I’m quoting Speaker Boehner now – “a financial disaster, not only for us, but for the worldwide economy”.’
However, talking does not make this crisis of the capitalist system go away – it is worsening by the minute, all over the world.
In the UK, the Construction Skills report stated yesterday that the construction industry in the UK will not recover its pre-recession peak level of output until 2022.
This sector lost 60,000 jobs in 2012, while output fell 9%, due in large part to public spending cuts.
Construction employment is expected to continue to fall every year until 2016.
‘Construction found itself at the heart of a perfect storm in 2012,’ said Judy Lowe, deputy director of CITB-ConstructionSkills, the industry training body that put the report together.
The sector had been ‘hit hard by a combination of public sector spending cuts and a lack of investment in the private sector’, she added, addressing a situation where public sector construction fell 20% last year, while infrastructure fell 15%, commercial construction 10% and private housing 5%.
Meanwhile, the state-funded banks, RBS and Lloyds, will need at least £30bn of public money to shore up a ‘black hole’ in their balance sheets. The banks must be saved at all costs!
Begbies Traynor, described as ‘the UK’s leading business recovery practice’ have focussed on their ‘Five Struggling Sectors to Watch in 2013’.
It stated that ‘since the start of the 2008-2009 economic crisis, more than 30 European airlines have already ceased trading.’
It added; about care homes, that ‘companies right across the supply chain are at risk of severe financial difficulties in 2013. . . We believe the sector is a ticking time bomb, with firms offering non-specialist care and operating from smaller occupancy homes, in particular, facing severe pressures on their finances in 2013.’
It continued on agriculture: ‘unless farmers act quickly to diversify revenue streams from their land by exploiting alternative uses such as wind farms, the sector faces a substantial increase in financial distress in 2013.’
On Local Authorities: ‘The funding challenges now leave local authorities facing a stark choice between making significant cuts to essential, frontline services, particularly Police Authorities, Fire Brigades and Prisons, or risk becoming financially unviable.’
On the NHS, it remarks that ‘While the NHS is in surplus overall, it is clear that some trusts are near breaking point . . . it is clear that many Trusts could face further financial challenges in 2013 and ultimately the prospect of mergers or even closure.’
Immediately ahead for the UK is complete breakdown. There can be no rescue from the EU. The German economy declined by 0.5% in the third quarter, there are 7,500 more job losses taking place in Renault in France, and last month, Renault’s car registrations in France fell 27%, while Peugeot-Citroen reported a 16.5% fall in sales worldwide, blaming ‘the crisis affecting the European automobile market’.
The Bundesbank, Germany’s central bank, has begun the repatriation of its gold holdings at the New York Federal Reserve and Bank of France.
Bill Gross, the managing director at bond giant PIMCO, tweeted to the world in fear: ‘Report claims Germany moving gold from NY/Paris back to Frankfurt. Central banks don’t trust each other?’
Of course they don’t trust each other– on the eve of an even more massive economic tsunami, the rule is: every man for himself.
For the working class of Europe, the USA and the world there is only one way out of the rapidly deepening crisis of the capitalist system.
This way is through the organisation of the victory of the world socialist revolution to remove bankrupt capitalism worldwide and replace it with socialism.