People's Summit participants line-up outside Grand Circus Park in downtown Detroit for a march on GM World Headquarters on June 15, 2009. The Summit demanded full-employment in the US. (Photo: Alan Pollock)
Originally uploaded by Pan-African News Wire File Photos
By Fred Goldstein
Published Feb 18, 2010 10:24 PM
After six months of so-called “recovery,” massive unemployment remains and foreclosures reach new highs. Now another fundamental aspect of the capitalist economic crisis — the budget crisis — is escalating as millions of people face the loss of vital services, threatening their futures and their very survival.
Hundreds of billions of dollars are going to bankers and corporations in interest, bailouts and low-interest loans provided by the government. Hundreds of billions more are going for war and occupation. Yet states all across the country are taking the axe to budgeted social services and laying off public service workers.
In addition to the state cutbacks, the Obama administration is preparing to issue an executive order for the creation of a so-called “independent budget commission” to cut Medicare, Medicaid and Social Security. The target time for the establishment of the commission is after the 2010 elections.
As reported by Workers World on Jan. 21, the economic crisis has slashed state revenues and 43 states plus the District of Columbia have carried out severe budget cuts, with more on the way. According to a report by the Center on Budget and Policy Priorities, 28 states are cutting health care services; 24 are cutting services to the elderly and disabled; 36 are cutting aid to higher education.
More than 132,000 state and local government workers have been laid off and hundreds of thousands more jobs are on the chopping block. The crisis has left the 50 states with projected total shortfalls of $350 billion for the years 2010 and 2011.
The CBPP has now updated its study — “Governors’ New Budgets Indicate Loss of Many Jobs if Federal Aid Expires” — to warn about the coming year: “States confront an estimated $180 billion budget gap for fiscal year 2011, which begins July 1, 2010, in most states.”
This date should become a deadline for mass mobilization across the country to stop the planned attacks from coming down.
Hitting seniors, children, the sick and disabled
As an example of the cuts, Arizona’s governor plans to eliminate the state’s children’s health insurance program, which covers 47,000 children, and repeal Medicaid coverage for more than 310,000 adults with low incomes and/or serious mental illness.
Mississippi would cut funding for K-12 schools by more than 9 percent and close four state mental health clinics. Hawaii plans to eliminate a program providing cash assistance to low-income people who are elderly or have disabilities; the state also plans large layoffs of state workers.
California Gov. Arnold Schwarzenegger is proposing deep cuts to health care, education, the state workforce and human service programs, beyond the draconian ones already in force. The cuts include reductions in Medi-Cal (Medicaid), a $1.5 billion cut in K-12 schools and community college funding, a 5 percent cut in state workers’ salaries, a reduction in monthly grants to low-income people who are elderly or have disabilities, and elimination of cash assistance for very poor families with children.
New York Gov. David Paterson is proposing $1.1 billion in cuts to state education; more than $400 million in reduced payments to health care providers and $100 million in other health-care cuts; $143 million in funding cuts for four-year public colleges and cuts to a financial program serving students from low- and moderate-income families; and elimination of state revenue-sharing aid to New York City and other localities.
Massachusetts proposes to eliminate $174 million in Medicaid provider rates, restorative dental services for 200,000 adults and state funding that provides housing vouchers for the homeless.
All these cutbacks fall the very hardest on the African-American, Latino/a, Middle Eastern, Asian and Native communities, which were already in near-depression status before the economic crisis. It also greatly spreads and intensifies the suffering of undocumented workers.
This is just a sampling of the types of planned cuts across the 50 states. They come at a moment when poverty and deprivation are escalating due to unemployment, foreclosures and evictions. Public services are needed more than ever at the very moment they are being destroyed by heartless government officials.
Bankers demand ‘austerity’ — for workers, not themselves
These officials are acting on orders from the bankers and bondholders who want to make sure that the state governments don’t default on their loans and that interest payments keep flowing to bolster profit margins.
Social services, public education, subsidized medical care, cash assistance to the poor and many other benefits have been fought for and won over the decades. The purpose of these services is to protect sections of the working class from the harshest features of capitalism and its system of exploitation and oppression.
Even in so-called “normal” times, the ruling class is always trying to cut back on social services. Beginning at the end of the Carter administration and continuing through the Reagan years and Clinton regime (which destroyed the welfare system), this trend has been steadily advancing.
In the present economic crisis not only are the bankers and bosses laying off workers in the millions, but they want to cut back even more on those very services that would cushion the hardships.
With massive unemployment and the shrinking of the capitalist economy, government revenues have declined drastically. A fundamental feature of the present economic crisis is that the capitalist governments, not just in the states and not just in Washington but all over the world, have to hold up the capitalist system. The bosses and the bankers are useless as far as getting masses of workers back to work.
So the capitalist government has given tax breaks, bailouts and subsidies to the capitalists while having to provide some assistance to the workers in the form of extended unemployment insurance, food stamps and other subsidies to keep them from starving.
The underlying cause of the present economic crisis is capitalist overproduction on a massive, global scale. So the capitalists, from the owners of the auto industry to the technology industry to the construction and housing industry, are shrinking the economy.
The creation of new value — real value created by workers, not fictitious, purely paper value created by speculators, stock brokers, hedge fund managers, etc. — is lagging. Income in wages is declining. Thus taxes collected from workers and businesses are declining, along with state revenues.
But the capitalists are the ones shutting down the factories, laying off the workers, lowering wages, forcing millions to work part time, foreclosing on homes, etc. The bosses and bankers are responsible for this economic crisis.
When their governors cut budgets, it is to try to make the workers pay for this crisis. Meanwhile, trillions of dollars flow out of the public treasuries in the form of bank bailouts and unlimited funds to the military-industrial-banking complex for conquest, death and destruction. This adds up to trillions in bank bonuses and profits for stock brokers and speculators. The banks and corporations make huge profits off the exploitation of workers and then cry for government help when it looks like those profits may be whittled down.
There is a budget crisis and the question boils down to which class created the crisis and which class is going to pay. The rich capitalists created this crisis and this tiny minority of parasites who live off the people should pay to keep disaster from falling on tens of millions of workers and on the communities in which they live.
It will be very educational for the workers in this country to pay attention to what workers in Greece are doing about a similar budget crisis. The Greek government owes hundreds of billions of dollars to bankers around the world, especially in Europe but also in the U.S. — including the bandits at Goldman Sachs.
Many European countries share a common currency, the euro. The world’s bankers, headed by the German ruling class, are demanding that the Greek government solve its budget crisis by cutting back on public workers’ pensions and salaries, extending retirement age and so on. One third of workers in Greece are government workers.
‘Not one euro to be sacrificed to the bankers!’
The Greek working class has a very militant history of class struggle and has won many concessions from the Greek capitalists. Now the bankers in Europe and the ruling class in Greece want to destroy those concessions on the basis of bringing down Greece’s budget deficit.
The answer to this argument was given in a massive one-day strike on Feb. 10 that shut down most of Greece. A reporter was on the scene of a mass demonstration and wrote the following:
“[T]he government’s proposals for deep spending cuts to rein in the deficit have met significant resistance.
“‘We won’t pay for their crisis!’ voices amplified by loudspeakers blared from Klafthmonos Square. ‘Not one euro to be sacrificed to the bankers!’” (New York Times, Feb. 12)
And a few days before the strike, Panagiotis Vavougios, the 80-year-old head of the powerful, 200,000-strong retired civil servants union, told the Times: “It is not the workers that should be blamed for this; it is bankers and large capital. We will take to the streets.”
This message should reach the labor movement here and all progressive forces in the community, on the campuses and in high schools, throughout the anti-war movement. The cutbacks must be stopped; services must be restored; layoffs must end. Not one dollar for the bankers! Let the rich pay!
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