The downgrading of the US by S&P, to my mind, was a threat from finance capital that the US government would have to cut back on public expenditure. The fact that such a downgrading has resulted in a downswing in the stock market, basically shows the irrationality and the fragility of the stock market and finance capital. On the other hand, it is precisely because of such shocks in the stock markets, that the US and other governments might be forced to obey the diktats of finance capital and actually cut back on public expenditure. This is happening before our very eyes in the USA as well as in Europe. Again, the irrationality of finance capital is obvious here, since with such a cut back, there is a real possibility of a double-dip recession in the USA and the advanced capitalist countries. This is precisely what happened in 1937, when Roosevelt was forced to cut back on government expenditure and the US and world economy again plunged into depression, after showing signs of recovery. The depression ended only with the stimulus called the Second World War.
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