There is a growing consensus in the global ruling class on the need for cuts.
So this week US politicians agreed $38.5 billion of cuts—all in the next 12 months.
These are the largest spending cuts in history. They will slash budgets for community programmes, infrastructure investment and healthcare, among other things.
The Environmental Protection Agency’s budget will be cut by $1.6 billion.
In contrast, the Commodity Futures Trading Commission gets $74 million extra.
Governments are imposing austerity across Europe. But instead of stopping the “contagion” of financial crisis spreading, the opposite is happening.
Cuts are supposed to reduce government debt by cutting public spending.
But by cutting demand for goods and services, economic output falls. That means less tax receipts and more benefits paid out. This increases the burden of government borrowing, so fails on its own terms.
Cuts are a way of throwing all of the burden for paying for the crisis—and keeping the system going—onto ordinary people.
The crisis has got a long way left to run.
A better future depends on the massive social and political struggles that can break the stranglehold of the austerity consensus—and stop the cuts.