It’s official—austerity isn’t working. When the banks first went into crisis, politicians rushed to pour public money in to keep them afloat.
Now in Britain, across Europe and the US, governments are imposing brutal austerity programmes on ordinary people to get the money back.
Pensions are being attacked. Welfare benefits are being cut back. Public sector workers are seeing jobs go and pay packets slashed.
But bodies like the International Monetary Fund and the Bank of England—the very institutions that argued for these harsh measures—are getting worried. Their medicine looks like it might be killing the patient.
The financial stability of nation states is under threat because of the scale of the debt run up from the bailouts.
But cuts in public spending and attacks on workers’ standards of living are not helping.
This is no surprise.
If you are unemployed, have had a pay cut, or are worried about losing your job, then you are going to cut down on what you spend.
This has a negative knock on effect across the economy as everything slows down.
This is true whether you are in Britain, Spain, Ireland, France or Greece.
The rich and powerful have always looked to attacking the poor as a way out of any crisis. And it is the most vulnerable paying a terrible price.
Almost one million young people in Britain are not in a job or education—the highest number since records began over a decade ago.
The reasons behind the worsening economic crisis may be common sense to most, but it has taken a while for it to sink into world leaders’ heads.
One economist wrote in the Guardian about the stages of every crisis—the first bubble, denial, acceptance, panic and recovery. But they warned that this time we might be seeing “one of the rare crises that has a sixth phase—relapse”.
The system can’t fix itself. It is flawed at its heart. It feeds on relentless competition for profits, there is no plan—it is chaotic and irrational.
Millions across the world are crying out for change.
We need a socialist alternative that puts the needs of the mass of ordinary people above the bank balances of the few.