THE horrific future under capitalism for workers and youth is being revealed on a daily basis, as the price of the government’s £1.3 trillion attempted rescue of the banks and capitalism begins to emerge.
The latest information of the pain that ‘is to be shared’ by the workers comes from the National Institute of Economic and Social Research (NIESR).
This has said that the retirement age must be raised to 70, and that the government will have to raise the basic rate of income tax by 7p in the pound if the debt is to be dealt with.
Other measures to reduce debt levels will include extending VAT to a wider range of goods, or imposing a five-year public sector pay freeze, and a 10 per cent cut in the public sector.
The consequence of not carrying out these policies will be the mass closures of hospitals, schools, universities, libraries etc, etc it states.
Meanwhile the debt of UK capitalism is growing by the hour.
Official figures show that Britain recorded a public deficit of £19.4 billion in September as the slump continued to hit the capitalist economy.
The deficit – or public sector net cash requirement (PSNCR) – for September compared with one of £13.3 billion during the same month in 2008, the Office for National Statistics said.
The public sector net borrowing requirement – the British government’s preferred measure of public finances – soared to £14.8 billion in September. That was almost double the £8.7 billion in the same month a year ago.
The total borrowing at this half-year stage was £77.3bn – a £43.5bn increase from the same point last year and the highest half-year figure since records began in 1946.
The end result is that government borrowing is set to reach £220bn this year as against Chancellor Darling’s budget prediction of £175bn.
The Bank of England governor on Monday night described the government’s generosity to the banks in the following way. ‘Anyone who proposed giving government guarantees to retail depositors and other creditors, and then suggested that such funding could be used to finance highly risky and speculative activities, would be thought rather unworldly. But that is where we now are.’
Further he added that the government had achieved a situation where ‘Never has so much money been owed by so few to so many. And, one might add, so far with little real reform.’
He said that pledges of stronger regulation were useless, and that the government had created ‘The biggest moral hazard in history. A situation where banks and financial institutions knew that they were too big to fail, and that the taxpayer would help them out if they got into trouble.’
King’s solution to this critical situation is to suggest an attempt to try and rewind history, to return to the pre-imperialist stage of capitalism by legislating to separate the banks’ activities such as holding savings, and offering loans to households and businesses – which could still be protected from the speculative practices of so-called casino banking, which would not get government protection.
This has already been opposed by Brown as being completely impractical.
In fact the imperialist epoch has witnessed the emergence of giant banking monopolies and finance capital. This sits astride the entire planet, dominating both industry and agriculture through financial exploitation and speculation with the making of super-profits as its only interest.
Such a creature cannot be regulated or dismembered, to restore what came before.
The blood sucking rule of finance capital is part of the death agony of the capitalist system, as is the huge slump, that we are experiencing. The only way that humanity can proceed beyond this final stage of capitalism is through carrying out the socialist revolution, to replace historically outmoded capitalism with socialism.