Labour’s shadow chancellor Rachel Reeves was making her pitch yesterday to the bankers and business bosses that any future Labour government would be a safe pair of hands for British capitalism, and promising them a ‘decade of national renewal’ with her plan for growth.
This plan for growth will, she pledged, be built on three foundation stones – stability, investment and ‘unlocking the untapped potential of Britain’s workers’.
She stressed this national mission to restore strong economic growth in Britain would mean the private sector ‘joining together with the public sector’.
Her audience of bankers and bosses correctly interpreted this as a Labour pledge to increase privatisation throughout the NHS and every other public service.
At the same time, ‘untapping the potential of Britain’s workers’ is shorthand for giving the bosses full reign to drive down wages and sack workers at will while ensuring the sick and disabled are driven into work through cuts to benefits.
Reeves and Labour leader Keir Starmer have already indicated that previous pledges made to the trade unions about strengthening workers’ rights will be dumped under pressure from employers and the need to achieve economic ‘stability’ in a British capitalist system that is headlong into recession and drowning in over £2.6 trillion of national debt.
The interest repayments on this debt mean Britain’s Treasury will have to pay over £100 billion on debt interest this year!
Britain is not alone in being overwhelmed by debt crisis.
Augustin Carstens, head of the Bank for International Settlements, which represents the interests of the world capitalist central banks, issued a stark warning that governments must stop their ‘relentless’ borrowing and must bring down the astronomical national debts run up during the long period of near zero interest rates.
Carstens, speaking at a lecture at Goethe University in Frankfurt, bluntly told governments that financial markets ‘can remain calm in the face of large imbalances until suddenly, one day, they no longer are.’
He didn’t identify an example of explosive panic by the financial markets to massive national debt, but he clearly had in mind the experience of the Tory government under Liz Truss.
Her mini-budget in 2022, with its unfunded tax hand-out to the rich paid for by more government borrowing, caused the international bankers to dump UK government bonds (used to finance the country) and force the Bank of England to intervene by printing money to buy up these bonds in order to avert the immediate crash into bankruptcy by Britain.
This is the future for the US, the biggest capitalist economy in the world, that Carstens is panicking about.
The US dollar national debt mountain is astronomical, standing at $34.4 trillion and increasing by $1 trillion every hundred days since 2023.
The Bank of America warned recently that the US dollar and economy face a ‘blowout year’ in 2024.
A blowout of the US economy drowning in debt will make the world banking crash of 2008 pale into insignificance. It will collapse the banks, financial systems, and industry in every country in the capitalist world.
Carstens has no solution to this crisis except to urge central banks not to lose their nerve and cut interest rates, while warning that increasing public finance spending will be a ‘significant challenge’.
In other words, he is telling governments they must cut and cut again all public spending in order to rescue capitalism from collapse by dumping the crisis firmly on the backs of the working class.
The working class in the US, UK, Europe and across the world will be made to pay for the capitalist crisis by having all the gains of the past destroyed to keep the bankers and government from crashing into bankruptcy.
Capitalism today is in its death agony, and the powerful working class will never allow itself to be dragged down with it.
In Britain the way forward is clear – the TUC must be forced to call a general strike to kick out the Tories and bring in a workers’ government that will expropriate the bankers and bosses, bringing in a nationalised and planned socialist economy.
Socialist revolution is the only way for workers to resolve the capitalist debt crisis.
