Revolution the only way out of capitalism’s debt crisis

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NEXT week, the Tory chancellor, George Osborne, will be announcing the results of his spending review to parliament, outlining £20 billion of austerity cuts over four years.

Spending on welfare, local government, education, and every other sphere of state expenditure will be cut to the bone in order to reduce the budget deficit to zero. This deficit, the gap between government income from taxation and other areas and what it has to spend, is currently projected at £69.5 billion for the year 2015/16.

For over five years, under first a Tory-led coalition and now a Tory government, the demand has been austerity, austerity and yet more austerity cuts in order to bring down this debt. Every single cut has, of course, fallen on the backs of workers and their families in the form of public sector wage freezes lasting over four years which has cut the take home pay of these workers dramatically in the name of saving the Treasury money.

Alongside this has been the all-out assault on every benefit from housing to jobseekers allied to a brutal regime of penalties imposed on the unemployed designed to drive them off benefits and into the gutter. Have any of these vicious cuts that have spawned food banks in every city and town in the country and driven millions into poverty achieved any reduction in the deficit? The answer emphatically is no!

Figures released yesterday show the monthly deficit for October has increased by a massive 16% from last year to £8.2 billion. What this means for the working class, young people and the mass of the middle class was spelt out by Samuel Tombs, chief UK economist at the consultancy Pantheon Macroeconomics, who said: ‘October’s poor borrowing numbers extinguish any lingering hope that the chancellor will be able to soften his austerity plans materially in next week’s autumn statement.’

That’s putting it mildly – these figures will give the green light to Osborne and the Tories to ramp up austerity cuts to unprecedented levels where the whole of the welfare state is abolished, the NHS privatised out of existence and every benefit and spending on social need is abolished.

Only by laying waste to every last penny of state expenditure can British capitalism ever hope to fight its way out of the debt pit it has dug for itself and pay off the bankers. The entire debt, both the budget deficit and the national debt, which currently stands in excess of a staggering £1.5 trillion, is owed to international banks and financiers who finance the government debt and naturally demand interest payment on these ‘loans’.

Every hospital that closes, every cut in pay for public sector workers like junior doctors, goes to paying off this debt to the bankers. British capitalism is so mired in unrepayable debt that the only way out for them is to lay waste to every single gain made by workers and turn the clock back to the 19th century with its ‘poor laws’ and ‘workhouses’.

This is a mammoth task for a decrepit capitalist system and a bankrupt ruling class, for it cannot be done in any peaceful way – it demands that the working class be smashed and defeated. The crisis for capitalism is that it faces a powerful working class that will not passively roll over and accept abject poverty and the destruction of its hard won rights to the welfare state.

Workers, and especially young people, are being revolutionised by this crisis. The reformist leadership of the trade unions and Labour Party preach that nothing can be done accept to appeal to the Tories to ‘soften austerity’.

Appeals are useless. What this crisis demands is a leadership prepared to lead the working class in a general strike to kick out this government and bring in a workers’ government and a socialist system that will repudiate capitalism’s debt, nationalise the banks and industry under a planned socialist economy where production is for the needs of everyone not the profit of a few.

Come to tomorrow’s News Line Anniversary meeting and join the WRP to build this leadership.