Who Benefits from Government Debt to the Financial Oligarchy?
Government debt is
mostly held by the private institutions of the financial
oligarchy. In lending money to
governments, the dominant oligarchs of the ruling elite
benefit in several ways.
The rich can park their money in a safe haven for a short or
long term and even receive
interest for doing so. This is particularly important for
the rich during crises such as the
current COVID-19 pandemic when other investments are risky
or they have pulled money out
of the stock market and have excess cash on hand. The
government in turn provides bailouts
and buys company paper securities that are not saleable at a
particular time to private buyers
because of the risk involved. The oligarchs have it numerous
ways! This is the public-private partnership in action to serve the rich.
The government receives money from this private borrowing
that is then used in pay-the-rich
schemes as handouts to the financial oligarchy and its
businesses. Examples are the handouts
to large corporations during the pandemic or the recent
federal government's $4.5 billion
buyout of the Trans Mountain Pipeline and the Alberta
government's $7 billion injection of
funds into the Keystone XL pipeline project. Both those
projects could not raise private
investment funds. Government money is routinely used to
finance large infrastructure projects
in which the biggest private construction and management
companies participate and gain
guaranteed profits.
The existence of government debts is used for propaganda
purposes to reduce spending in
social programs that directly benefit the people.
Governments and their mouthpieces in the
media scream that they need $60 billion yearly to service
the public debt held by the financial
oligarchy, which constrains and even contracts spending in
social programs. What a
self-serving farce!
The necessity to borrow from private interests is presented
as the only alternative for
governments to raise money as the financial oligarchy
considers taxation of the value its
workers produce within its private business interests as
detrimental to the economy. A
compliant media it controls do widespread propaganda for
this regressive view.
The financial oligarchy refuses to pay for the public
infrastructure it uses that benefit its
business activities, such as public highways, bridges, public
education and health care and
mass transit etc. The building of the infrastructure makes
huge profits for big business while
much of the payment for these necessary investments in a
modern economy fall to the public
purse without revenue returning to the governments from the
economic activity they engender
and the value they produce.
The issue is never broached in the imperialist media and
education system that government
debt to private interests is completely unnecessary,
wasteful and harmful. The state could
borrow from itself and repay the debt from the added-value
workers create in an expanding
and stable economy. If the government used the money
borrowed from itself to invest in
public enterprise then the increased value and income from
those enterprises would quickly
repay the debt and more, making the increased value
available for investments in social
programs as well as providing stable employment for workers.
The financial oligarchy refuses to recognize its social
responsibility towards the working class
that it employs and that payment for its capacity to work
must include its constant healthy
reproduction. The working class fulfils its duty to work and
has the right to receive payment
for the use of its capacity to work from birth to passing
away at a modern acceptable standard
of living.
This means in practice that the economy must continue
payments for the capacity to work of
the working class when unemployed or unable to work due to
injury, sickness or old age as
long as workers fulfill their duty to be available for work
when able and called upon. For this
arrangement to work, the financial oligarchy must recognize
that at this time in history it
controls the economy and as such bears the social
responsibility to ensure the rights of the
working class are guaranteed and maintained at all times. If
the dominant ruling oligarchs
refuse to recognize and fulfil their social responsibility
to the working people, then the ruling
elite must be forced to step aside so the people can build
the New.
If the working class gains control of the economy, then the
relation between the duty to work
and the rights of the working class assume an entirely new
dynamic within a new aim for the
economy to serve the people and to activate the human
factor/social consciousness to
humanize the social and natural environment.
Stop Paying the Rich!
No to Government Borrowing
from the Financial
Oligarchy!
Government debt to private investors has long been a
regressive feature of the
imperialist economy. The working class must expose the
ways in which the financial
oligarchy benefits from lending its money to governments
and propose a new direction for the
economy that favours the working people.
To cover the additional government spending during the
present crisis, governments estimate
they will have to borrow around $315 billion from private
sources. This will cause
government debt to expand greatly and become fodder in the
imperialist media attacking the
necessity to increase investments in social programs and
public services, which the people
require for a modern cultured standard of living. The
working class must prepare now to
denounce the hysteria that will arise from the increased
deficits and debts of all the
governments. Working people must not allow the imperialist
propaganda to go on without
exposing and denouncing it and showing how in fact the
financial oligarchy benefits from
state debt in so many ways. Organize and fight for a new
pro-social direction that favours the
people!
No to Government Borrowing from the Financial Oligarchy!
Stop Paying the Rich! Increase Investments in Social Programs
and Public Enterprise
and Services!
Note
Public government debt to the global financial oligarchy
and the associated
servicing costs keep growing year after year. As the
figures reveal, the growth is greatest
following the regular economic crises such as those of
2008, 2014 and the projected billions
to be borrowed this year.
This article was published in
Volume 50 Number 16 - May 9, 2020
Article Link:
Who Benefits from Government Debt to the Financial Oligarchy?
Website: www.cpcml.ca
Email: editor@cpcml.ca
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