the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
May 11, 2015
Eight years after the world’s debt mountain nearly brought down the whole financial system in 2007, you might expect that the world’s debt would have been cut to size. But it hasn’t been.
Current estimates show that, over these eight years, the planetary debt mountain has increased by 57 trillion dollars – that is, more than three times the annual GDP of the United States. For every dollar of wealth produced on the planet in a year, there is $2.86 worth of outstanding debt!
This reflects different things, though. For instance, the 7.5 trillion dollar increase in household debt is not due to a shopping frenzy, but to the general fall in living standards. By contrast, the 26 trillion dollar increase in corporate debt does not mean that businesses invest more – in fact, they invest less – but that they borrow, either to speculate, to buy up their rivals, or just to increase dividends, but in any case, not for anything socially useful.
As for government debt, worldwide it’s increased by 35 trillion dollars. Nine trillion of this comes from the U.S., where the government borrowed so much in order to bail out the banks that the national debt has doubled since 2007, to 18 trillion dollars.
In other words, the capitalists are using debt to line their own pockets. But by the same token, they’re stoking up the explosive ingredients for yet another financial crisis!