Debt Ceiling Deadlock in US
Even as large swathes of Europe reels under a stubborn debt crisis, from the other side of the Atlantic comes the news of another version of essentially the same problem – the federal debt ceiling crisis!
The US government has reached its debt ceiling of $14.3 trillion which is the present legal limit of the nation’s debt. If this ceiling is not raised by 2nd August the US treasury will be forced to default on the nation’s financial obligations, an unprecedented event in American history! This means that the US government will be unable to borrow any money to cover its payments from 3 August onwards whether it is towards social security cheques to over 50 million recipients or interest payments on US government bonds that are due later in the month. The coveted AAA credit rating of the US would be downgraded, which would send interest rates soaring, make the US Treasury bonds unattractive and destabilise the dollar thus sending tremors throughout the international financial markets.
The White House and Congressional Republicans agree in principle that the debt ceiling needs to be raised, but they are at an impasse on how to constrain the deficit’s rapid growth. For over a month we have been witness to the most ugly debates and mudslinging between the two parties, with each coming up with different formulae and trying to gain as much mileage for the coming presidential elections.
This confrontation has once again exposed the intrinsic class character as both Democrats and the Republicans are clearly on the side of the rich and both their formulae for deficit cuts threaten to plunge millions of working people into conditions of poverty, hunger, disease and premature death! Both are ready to sacrifice their social security measures and slash health care like Medicare and Medicaid. Neither of them is talking about deficit cuts by reducing the trillions being spent on war, other military interventions or their scores of military bases around the globe. Obama’s attempts to raise taxes marginally through closing some loopholes for hedge fund managers, the oil industry and companies buying corporate jets are all half-hearted as he needs funds from the same people for his elections. In fact in some respects his formula goes further right of the Republicans by slashing security services and health care even more than they do. The Republicans on the other hand are vociferously opposed to any increase in taxes for the super-rich and argue that the fiscal crisis is not due to the trillions spent on war and bank bailouts but due to the American peoples’ selfish and ignorant desire to live longer that is bankrupting the country!
In other word, both parties are going to make the people pay for the deficit cuts! This is nothing new as the working people of US had to pay over $23.7 trillion for bailing out the bankers, Wall Street and the uber-rich in the last crunch. They are also daily paying the price of capitalism’s greed through lay-offs, increasing unemployment, spiraling prices and watching their hard-earned savings evaporate while bankers and CEOs are taking home billions in bonuses.
Adding a further twist to the situation, House and Senate Republicans are proposing a constitutional amendment to balance the budget. This goes in the name of fiscal discipline, but enforcing a BBA (balanced budget amendment, which would require a balanced budget each year and would cap spending at a certain percentage of the GDP) would only exacerbate the problem by cutting programs, with more jobs lost and social sector spending slashed. Democrats, of course hope the Republicans would not be able to garner the votes required for this, at least for now.
All eyes are now on the deadlock between the two major parties of the ruling class. After a bitter battle of nerves, a compromise is expected – at least that is what past record (the debt ceiling has been adjusted upward frequently, more than 40 times since 1980) suggests. But that will only mean a short-term measure in crisis management – one that ends up worsening the long-term problem of debt-driven growth.
Voice of Resistance from Ecuador
Interview with CC Member, PCMLE
[This is an interview with Comrade Pablo Miranda, a senior member of the central committee of Communist Party of Ecuador – Marxist Leninist (PCMLE). The PCMLE is one of the largest ML parties in Latin America and its front organization Movement for Popular Democracy (MPD) has 5 members in the 124-member parliament. It has recently formed an alliance with Pachakutik, a political organization representing several indigenous communities. PCMLE and MPD have an impressive presence amongst the teachers and students. They have led the struggles of Afro-Ecuadorians and MPD was the first party to represent Afro-Ecuadorians in parliament. For more details of their work in unions, see the September 2009 issue of Liberation. This interview was conducted by Tamarai and Surya.]
Can you give us a brief history of PCMLE?
Our party was formed in 1964. We have been dedicated to organize and make the Ecuadorian revolution as part of the international proletarian revolution. The PCMLE rose as the historic necessity of the working class and people of Ecuador as a revolutionary political vanguard as the old communist party had degenerated into a revisionist form faithful to Khrushchevite order.
We actively participate in the political struggles/situations with the immediate proposals and aspirations of the working class using all forms of struggles, demands, stopping activities, the strike and seizing of land for agriculture and housing, street mobilizations and meetings, national marches, local and broad popular uprisings. An important activity has also been ideological, theoretical and political struggle in defense of ML and against revisionism and opportunism.
In the course of the social and political struggles, we have been attacked by capitalist and imperialist governments. The party was banned at various times. Some its leaders have been imprisoned tortured and killed among them Afro-Ecuadorian parliamentarian Jamie Hurtado and Rosa Paredes.
We learnt in 2009 that there are 15 different organizations such as UNE, UGTE, FEUE etc. that you work with and organize in. In the last two years, has there been an increase in the membership?
The trade unions, peasant, students movements have continued to grow despite the anti-trade union policies of the Correa government which restricts the permits and persecutes its leadership. It has criminalized dissent and social struggle and accuses activists as terrorists. Nevertheless it is accurate to say that the percentage of workers in unions has not even reached 5%. An important characteristic of the organized mass movement is that the vast majority identifies itself as the protaganist of change, with the left. Ultimately it works together with the movement of the indigenous and black nationalities.
President Rafael Correa is known as a leftist leader in the mainstream media. What is your analysis of his government and its policies?
This government elected by a majority of Ecuadorians on various occasions had presented a programme that would benefit the communities. Gradually, it has been subjected to the pressures of imperialism and oligarchy. Now it is just another government of the dominant classes although it uses the slogan of socialism of the 21 century. As a consequence of the words and the populist policies like bonuses, giving out food, uniforms etc. it can rely on an important electoral base. Effectively Correa is a leader of one sector of the dominant classes, North American and Chinese monopolies. He faithfully defends their interests. For the revolutionaries things are clear, we are facing the serf of oligarchs who has a great capacity for trickery.
In our previous interview, we learnt that strategic sectors of the Ecuadorian economy are in the hands of foreign MNCs. Has this influence increased or diminished as a result of Rafael Correa’s policies?
Anybody who reads the official statistics will conclude that now more than ever the mineral resources have been handed over to the great MNCs - these include copper, gold, silver, and uranium. This is similar to what happened with petroleum, increased concessions to MNCs, and dollarization of the economy.
What were the key issues in the recent referendum and why did you oppose it?
The referendum was proposed on one hand to preserve Correa’s popularity and credibility among the masses which has actually declined. On the other hand, it concentrates more power with the president. He is able to appoint judges, offer impunity for acts of corruption that proliferates in his government, persecute social activists, workers, youth and indigenous people and one or two from the opposing bourgeoisie. It is also possible to clamp down on freedom of speech and expression. With this objective the government orchestrated 10 questions for the referendum. The PCMLE, indigenous and black organizations were united in NO to the referendum. The democratic and popular NO campaign defended the rights and sacred social gains of the constitution and denounced the reactionary and rightist character of the referendum.
Effectively according to the results Correa won with 46% of the vote for YES, the NO votes were 41% and while 13% cast a blank vote. If you take into account the number of registered voters the government only received 35% of the votes. Correa lost in 12 and won in 12 provinces.
It is necessary to indicate that a section of the dominant classes was for NO. The most recalcitrant reaction of the traditional right accused Correa of being an ally of Chavez. We identify this position as the anti communist NO and thus distinguish that position from our position. We fought Correa as a symbol of capitalism and imperialism.
We understand that NGOs, especially those receiving funds from imperial countries, work closely with indigenous people. What strategies and tactics are you employing to increase your influence in the indigenous communities?
In Ecuador NGOs they carry out their operations in the indigenous movement and in the poor neighborhoods, among black people and women. They are agents of imperialism and reaction. Some of them work with Correa government with an objective to deviate the masses from the path of struggle towards a model of charity. The government of Correa attacks the indigenous movement accusing them of working with imperialism. That is completely false. The political positions of indigenous movements express independence from NGOs in the interest of their own nationalities. This however does not take away the noxious role charitable foundations play in Ecuador.
Our work in social and national liberation struggles of indigenous peoples of Ecuador is only possible by combining ML principles with the liberating social practices of the indigenous movements. We have translated the Manifesto of the Communist Party into Quichua, the principal language of the indigenous peoples.
A militant student union leader was arrested under false charges. What were the reasons? Are there other similar attacks against militant movements?
Marcell Riveira has already been in prison for 18 months condemned for terrorism and sabotage. His crime as the national president of Federation of University Students of Ecuador (FEUE) was to lead the struggle of the students of the autonomous university and the student body. His freedom has been demanded by all the popular and left social organisations.
Additionally, 8 peasant leaders have been condemned as terrorists for opposing the large scale mineral exploitation. More than 500 activists, with several indigenous people among them, were tried for opposing the authority of Correa.
What is your analysis of the police uprising of 2010? Was there an imperial hand behind it?
The PCMLE actively participated in solidarity with the police and army troops who were rebelling against the army leadership and the government to defend their rights. This was a revolutionary and just position at an opportune time. The soldiers and police at that time stopped being a part of the repressive state machinery.
Another aspect is that the government of Correa along with the dominant classes in Ecuador, governments in Latin America (both progressive and right wing), Europe, Organization of American States (OAS), and UN denounced the attempt as a coup d’etat. The real truth that this was a rebellion of lower ranks of police and army troops is now coming to light.
How does the election of the new President of Peru impact the political situation in Latin America?
The triumph of Ollanta Humala is a positive step. The ultra reactionary forces represented by Fujimori were defeated. Moreover, it heightened the expectations of the workers and other people of Peru similar to other countries of Latin America (LA). The progressive governments that have been elected in LA, and the manner in which they have governed, show that in certain situations the interest of the people and workers were expressed against the dominant classes and imperialism. This is evident in their platforms and the popular expressions and bourgeois nationalism. Humala has been clear until now of the maintenance of the economic model in Peru and this is a position that responds to the pressure of the business class. We must not forget that there is also pressure from the workers and the masses, and the left. Still, as we understand it, in Peru a new landscape is being formed. Better conditions of social and political struggle for the left and communists are being created.
What direction do you think the Bolivarian process is taking in Venezuela? Unlike in Ecuador, President Chavez is strengthening the communal councils and other grassroots struggles? Do you agree?
Chavez is leading for more than 12 years a process that involves millions of Venezuelans who are both the protagonists and beneficiaries of important economic and social gains. They have been supporting the government both electorally and on the streets. This is a nationalist and democratic project and it has never been a social revolution. Capitalism and imperialist domination are still very powerful in Venezuela. Nonetheless, the mass of workers and youth are earning guarantees that they did not have in the past.
Chavez is involved in a process with contradictory positions. On the one hand he is criticizing the majority of Venezuelan businesses and US. On the other hand he is preserving the economic interests of the Yankees in Venezuela and supporting another group of businesses. On the one hand there is the Bolivarian revolution and on the other hand they are handing over the Columbian revolutionaries in Venezuela to the right wing government of Columbia. We support the democratic and nationalist positions of Chavez and on the other hand we criticize the collaboration with the government in Columbia.
PCMLE has been holding international seminars (annual seminar held in Ecuador in July) on the platform of anti-imperialism for several years. Is it to build unity and solidarity amongst ML organizations?
Since 1997 we started this seminar to contribute to the unity of revolutionaries of LA and world. This seminar was an initiative of ML forces in LA which was open to revolutionaries, nationalists that are fighting against imperialism, and people fighting for their rights.
(We want to thank Pablo Miranda, Ramiro, Guido, Arturo, Edgar, Angel, and Santiago in Quito. We also thank Rose Brown, affiliated with Revolutionary Organization of Labor, who provided tremendous help with translation.)