Bipartisan budget cuts target working people

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President Reagan appeared on national television on Nov. 20 together with Democratic and Republican leaders in Congress to announce agreement on a plan for reducing the budget deficit.

The deficit-reduction plan, yet to be approved by Congress, calls for increases in revenues and cuts in spending that would Why did the stock market crash? See article p. 6 slice $30 billion from this year's deficit and $46 billion from next year's.

Deficit-reduction negotiations had been kicked off by the stock market plunge of Oct. 19. The four weeks of haggling was widely portrayed as a fight over which class would bear the brunt of tax increases and spending cuts.

Democrats were depicted as favoring tax increases and cuts in military spending, which, it is alleged, would fall mainly on the rich; while Republicans were described as opposing an income-tax raise and favoring cuts in spending on social services, which would affect the poor.

This presentation of the terms of the debate is pure hogwash intended to bolster the illusion that such differences really exist. The real reason for the wrangling over how to deal with the over $160-billion budget deficit-one of the manifestations of a crisis which runs far deeper-is that differences exist over which measures will best serve the interests of capitalism and the capitalist class.

There are two main problems for the ruling capitalist policymakers to solve:

The first is how to forestall or at least minimize the collapse of production heralded by the market meltdown—without setting uncontrollable inflationary forces into motion.

Half of this medicine, measures lowering interest rates, was injected into the economy as a knee-jerk response to Black Monday. But this medicine feeds inflation. It contributed, for example, to a rapid decline in the value of the dollar as measured against the currencies of the United States' main industrial trading partners.

Reducing the budget deficit is the other half of the medicine. But such anti-inflationary measures have an opposite effect, countering those intended to keep economic activity from spiraling into a depression.

The real debate, then, is over which budget-deficit medicine will least defeat the main purpose of the doctor's treatment—to stimulate economic activity. This is the first part of today's capitalist dilemma.

The second main problem for American capitalists is how to compel their main trading partners, primarily West Germany and Japan, to stimulate their own econo(continued on page minorets ON STM ICAL 53 STRIKE prix LOCAL 153 Striking New York Stock Exchange Workers on picket (PLOYEES line on Nov. IMPLO ON STRIKE LOCAL 153 Kirk Condyles/Impact Visuals