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More straw for the economic fire

Looking for alternatives to the capitalist permanent crisis

Talking to philosophers, psychologists and psychiatrists

Can the economic stimulus measures implemented in Europe and the USA effectively counter the current crisis?

Ever faster, ever deeper – capitalism is once again chasing records. According to official, recently released data, the US economy contracted in the second quarter of this year a staggering 32.9 percent. This is the largest drop in the gross domestic product of the largest economy in the world since the collection of current statistics in 1945.

The historical magnitude of the current crisis is evident in relation to the previous crisis, the consequences of the housing bubble that burst in 2007 in the United States and the EU, when US GDP shrank by 8.4 percent in the worst quarter of 2008. The drama of the situation is particularly evident from the fact that the number of cases in the United States has been over after a hasty end to pandemic control June rise again and many US states are considering another “lockdown”.

With around 4.6 million Confirmed Covid-19 cases (with a global infection count of 17.4 million) and more than 155,000 fatalities form the center of the pandemic in the United States, ruled by a right-wing populist – ahead of the right-wing extremist Jair Messias Bolsonaro in Brazil.

All states “started to” open “the capitalist economy” to a certain extent “, it said in the Guardian, but increasing numbers of cases in California, Florida, Texas, and other states have led to re-enforcement of restrictions on business activity, which further increases “pressure on the US economy”.

The emerging second wave of the pandemic thus hits a dilapidated capitalist economy that has already experienced a historic slump and – in view of exploding mass poverty and social conflicts – must literally get back on course for growth at any price.

The particularly severe course of the crisis in the United States results on the one hand from the extreme deregulation and disruption of the country’s social infrastructure in the past four decades of neoliberal political hegemony, and on the other hand from the existence of a highly profitable, privatized health sector that has been unable to effectively counter the pandemic.

Due to excessive lobbying, this will not change even under a possible democratic president. The Biden campaign has made it clear that the introduction of a public health system is out of the question. In addition, there is the compulsion to grow inherent in the capitalist system – a consequence of the recovery movement of capital – which makes it impossible to overcome all external crisis shocks in the longer term, which one would have to face by reducing economic activity.

In addition, in the United States, the recovery in the economy intended by the relaxation of the “lockdown” appears to stagnate broadly, like that New York Times reported. There can hardly be any talk of a “V-shaped” economic recovery, in which an extreme economic downturn would be quickly replaced by a steep upswing.

The possibility of a “K-shaped” Economic recovery discussed in which the upper classes and wealthy sections of society stabilized quickly, while the rest of society would remain permanently in poverty.

Around 30 million US citizens are currently receiving support from unemployment insurance and various crisis programs, although this number would have “slowed down” in the past two months because the macroeconomic effect of increasing new hires will be reduced by a continuing high number of new unemployed people.

In the past week, 1.4 million wage earners registered as unemployed, which was the 19th week in a row where this value had exceeded the mail mark: “An unimaginable number before the pandemic,” said the New York Times.

The slow economic recovery, coupled with signs of renewed economic deterioration, is also causing consumer confidence to collapse – in other words, the buying mood of those sections of the population who have not yet fallen. Thus, the effects of the first large stimulus package appear to be in the range of around two trillion dollarsthat Washington is imposing in response to the current crisis, has already evaporated.

For this reason, negotiations in Washington are again in full swing to protect the ailing late capitalist system from total collapse with new financial injections. Initial estimates of the usually well-informed crisis within Wall Street assume that the second stimulus package will be around one Trillion dollars should add up.

The economic flash in the pan should therefore be maintained by means of further economic measures worth billions. Because of the full campaign, even wage earners in the United States have a chance to get one-off payments again. In the first stimulus package, US citizens received $ 1,000 as a bridging aid. Trump wants this time even $ 1,200 pay off.

Negotiations on the type and scope of the new stimulus package are currently in a dead end, because the Republicans want to radically cut the unemployment benefit grants decided as part of the first support program. The weekly additional payments for the 30 million unemployed army are to be reduced from $ 600 to $ 200 so as not to prevent wage earners from “looking for work,” as the Republicans put it.

Currently, this temporary unemployment benefit for millions of US citizens is about to expire social descent see threatened misery that seems to be early capitalist.

Tomasz Konicz, Florian Rötzer

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