Crisis Deepening Rapidly – Socialism The Only Answer


IN ‘going-broke Britain’ the number of people becoming insolvent in England and Wales in 2009 was 134,142, according to official data from the Insolvency Service. In the fourth quarter of last year alone, 35,574 people became insolvent, up 24.9 per cent from the last three months of 2008.

At the same time, the Royal Bank of Scotland, now 84 per cent owned by the state, and notorious as the government bank that loaned billions to Kraft so that it could buy Cadbury in order to break it apart, is to announce losses of more than £7 billion for 2009.

The Darling-run Treasury, well known for its love for the banking class, is also set to rubber stamp a bonus pool of £1.3bn, for the banking failures, who are also supported by a government-backed insurance scheme.

In fact, in these days of enormous economic and political crisis, when workers are being threatened that they must either accept wage cuts or mass unemployment, or both, a number of banks, including Barclays Capital, UBS and Morgan Stanley, are raising salaries by as much as 100 per cent for some staff.

The crisis and who is to pay for it are definitely class orientated.

It began with the US mortgage collapses, that after the Lehman Brothers disaster brought down the whole of the world banking system, spurring on a slump and massive unemployment, and threatening entire states with national bankruptcy.

Last week, share prices crashed all over the capitalist world as Greece, which has a budget deficit of 13.0 per cent of its GDP and a national debt of 95 per cent of its GDP, lashed out at its working class and small farmers, and, egged on by the EU, began making the most savage cuts.

Greek workers are taking general strike action this week and Greece is now unable to raise the billions needed to finance its continuing budget deficit.

Greece is going bankrupt, in a situation where its working class is being driven forward to revolutionary action, and where the German bankers are are refusing to bail it out, since this would encourage Portugal, Ireland and Spain to get out their begging bowls.

The German banks are warning Greece that it is either make the working class pay or face being dumped out of the EU.

The offending EU states are now known as the PIGS (Portugal, Ireland, Greece and Spain).

That risk of what is being called ‘contagion’ is, however, great. France, Germany, and Italy all have budget deficits that are more than three per cent of GDP.

Greece is now occupying the position of Russia in 1917 ( it was known as the weakest link in the capitalist chain). However, the other links are not that much stronger.

Outside the Eurozone, the UK has a budget deficit that is 12 .6 per cent of GDP and a national debt that in 2010-11 will reach over 80 per cent of GDP.

In the US, Obama is budgeting for a national debt of $28tn by the end of 2010, twice as big as the US economy.

The writing is on the wall for capitalism.

No wonder the catchword in the mouths of the bankers and capitalists of Europe is ‘contagion’.

No wonder the fear is that debt buyers will push up the interest rates that they charge to the governments that are on the brink.

No wonder this situation is popularly called the global debt bomb!

It is crystal clear that there is only one way out of the crisis for the working class and the poor of the planet.

This is to build sections of the Fourth International in every country, capable of providing the required leadership to ensure the smashing of capitalism and imperialism and the victory of the world socialist revolution.