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The global recession melts the economy: who will pay the bill?

Together with the Covid-19 pandemic, which continues to spread throughout the world, another “virus” threatens society: that of recession. The economic and social effects of the combined crisis – health, political and social – are still unpredictable. In Europe, still in the eye of the hurricane of the spread of the disease, all the economic indices collapsed in the first quarter: the retraction in countries like France, Italy, England and Germany oscillates between 4 and 6%. Not to mention the destruction of jobs and the reduction in the wage bill.

On Tuesday, April 14, the International Monetary Fund (IMF) stated that the “great paralysis”, as the present crisis of the world economy is being called, will lead the planet to a recession even worse than that of 2008. The IMF states that the current crisis can only be compared to that of 1929.

In Brazil, the situation is even more serious. There is a political battle against Bolsonaro, which denies the real situation of the pandemic, retrofeeding the most acute elements of the general crisis. In the absence of coordinated work, the “war effort” – which requires more centralization and cooperation – produces less effect, either by social isolation “by half” or by the government’s inability to manage the country on the edge of the cliff.

The workers’ and youth movement still has few conditions to intervene, hard hit by the objective condition and, on top of it, by the weakness of the opposition, incapable of offering a path.

Faced with this scenario, it is necessary to debate who will pay the bill. It is ironic that Boris Johnson interviewed last Sunday when he left the hospital ICU, in which he thanked the public health system and the immigrant health professionals for their cure. The rage of neoliberals in destroying public services is transformed into gratitude out of place.


Social and economic genocide

If the pandemic leaves terrible marks in Europe, where the standard of well-being is still much higher than in the countries of the periphery, what should we think of the arrival of the peak in Latin America and the global South? The effect of covid-19 on the Latin American continent, with its pockets of misery, scrapped public services and a large part of the workforce in informality, will be terrible. What we are witnessing in Ecuador, with bodies left out in the open, is a harbinger of a general reality of health collapse, but also of economic collapse.

The measures of Bolsonaro and Guedes put the solvency and profitability of banks, the financial system, public debt creditors and large companies in first place. The MP that allows the reduction of workers’ wages and working hours has already pushed one million workers to live with reduced wages and enormous difficulties. In turn, spokespeople for the bourgeoisie are scared by the economic news, demanding that the opportunity of the crisis be taken to approve measures that they have long desired, such as cutting civil service salaries, increasing outsourcing, an end to stability and to competitions. The working class, both formal and informal, in the public and private sectors, is being condemned to insecurity, indebtedness, impoverishment and unemployment – it is estimated that the number of unemployed in Brazil could double in the coming months.

The Bolsonaro government is to blame

In Brazil, the pandemic has already surpassed 25 thousand cases and 1.5 thousand deaths. There is a possibility of massive underreporting: some sources say there are 10 times more cases of covid-19 in the country. A tragic example of the rapid spread and its consequences is the situation of Manaus (AM), whose health system has already collapsed.

Bolsonaro is largely responsible for the worsening of poverty. By relativizing the coronavirus, making fun of it, visiting businesses and encouraging the “carreatas da morte”, the individual who occupies the presidency exposes millions of Brazilians to risk. Together with Guedes, he proposed that the basic emergency income should be only 200 reais. His only concrete proposal is to resort to hydroxychloroquine, a drug whose effectiveness against covid-19 has not been proven.

At the same time, its anti-grassroots and anti-national orientation, of complete submission to Trump, creates more difficulties for the arrival in the country of the devices and inputs necessary to face the disease, as in the shameful case of “confiscation” by the U.S. government of material purchased by Brazilian state governments with Chinese suppliers.

This is a real policy of death, as the neo-fascist supporters of Bolsonaro unbelievably point out in the diffusion of “humorous” montages on the Internet in which the president appears laughing and dancing while carrying a coffin.


Fighting for the emergency program

It is necessary to follow the demand for measures to tackle the spread of the disease and mitigate the effects of economic paralysis on workers. It is necessary to speed up the payment of basic income; promote industrial reconversion to produce inputs and equipment, such as respiratory ventilators, needed in hospitals; defend health workers; in addition to promoting massive testing, combating underreporting and helping the isolation of patients. Who will pay the costs of the crisis? Millionaires must be taxed, through a tax on large fortunes and large inheritances; taxes on profits and dividends; in addition to the taxation of banks and the financial system. There are a number of other fundamental measures, such as the revision of the spending ceiling and the Fiscal Responsibility Law, and the auditing of public debt (as, by the way, established in the 1988 Constitution). As Luciana Genro’s video series has shown, Brazilian billionaires – and not workers and public servants – should pay the bill for the crisis!

Via Movimento Magazine

A new page to support and build new alternatives in Latin America and the world, defending the power of the workers and people against the 1% of the rich and privileged, and a society without exploitation.

Writing office

  • Pedro Fuentes
  • Bernardo Corrêa
  • Charles Rosa
  • Clara Baeder