COVID excess deaths “saved” $300 billion in Social Security payments

Benjamin Mateus

The devastation of the US public health system over the past month, since the inauguration of Donald Trump, may seem at first to be chaotic or even accidental, as groups of workers have been fired, then in some cases hastily rehired when it emerges that they were conducting vital work, as in monitoring H5N1 bird flu outbreaks.

Much of the damage comes as a consequence of Trump appointing an array of quacks and enemies of public health to fill the top positions in the Department of Health and Human Services, including anti-vaccine demagogue Robert F. Kennedy Jr. to head the agency, television doctor Mehmet Oz to head the Centers for Medicare and Medicaid Services, and COVID-19 denialist Jay Bhattacharya to head the National Institutes of Health.

A study recently published by the National Bureau of Economic Research, a leading corporate-backed think tank, suggests a more sinister, even malevolent motive. In deliberately wrecking the public health system, the Trump administration is counting on the ensuing rise in death rates to reduce the overall expenses of the Social Security and Medicare Trust Funds, thereby freeing up money for Trump’s priorities of military spending and tax cuts for the wealthy.

The NBER study estimates the effect of US COVID-19 excess mortality on Social Security outlays. There were 1,755,354 excess deaths in the US during the deadliest phase of the COVID pandemic between March 28, 2020, and January 21, 2023, for Americans 25 years old and older, according to the NBER working paper utilizing CDC data. While COVID directly was responsible for more than 1 million people in this time frame, a staggering 700,000 more Americans died of supposedly non-COVID deaths above what was expected. The death rate stood at 76 per 10,000 people. 

(The WSWS has been informed that the NBER is reviewing the excess deaths estimate, after issuing the study in preprint, and may revise it, but the overall conclusion about the link between COVID deaths and reduced payout of Social Security benefits stands).

Excess deaths by quarter, cause of death, and age group (under and over 65 years), based on weekly CDC data. [Photo: National Bureau of Economic Research]

The data shows the horrific impact on retirees. Three-quarters of the excess deaths, or more than 1.2 million, were among those receiving disability benefits and OASDI (Old-Age, Survivors and Disability Insurance; the official name of the Social Security Insurance program) at the time of their death. On average they were 79.2 years of age and lost nine years of life due to the pandemic.

According to this study, the members of this group would have collected on average $184,000 in retirement benefits. Their deaths had a net positive effect on the OASDI fund, “because of a reduction in future retirement benefits” to the tune of $287 billion that will not need to be paid out.

The analysis also found that close to 600,000 were employed at the time of their death. In this category, the study estimated that had they lived, they would have worked an average of 10 more years and could expect to earn another 14.4 years in retirement benefits. Without the pandemic, this group would have paid $89,000 in OASDI taxes and received around $203,000 in retirement benefits. On average they lost 23.7 years of life. 

The COVID pandemic left a legacy of grief and destruction with 313,000 additional Social Security beneficiaries—243,000 surviving children under 18 and 70,000 surviving spouses who have children under 16. The study estimates that “on average, surviving children and spouses will receive 8.4 years and 7.5 years of benefits, with lifetime benefit amounts of $121,000 and $58,000.” 

These additional benefit payments to survivors come to $82 billion, partially offsetting the amount “saved” by the Trust fund from not paying benefits to those who died, leaving a net gain of $205 billion. However, since many surviving spouses and children do not claim their benefits, a further adjustment estimated at $32 billion in the savings by the Trust fund raised this amount to around $237 billion. 

These calculations demonstrate in cold economic terms what has been a major aspect of the “let it rip” approach to the COVID pandemic from the beginning. Those over 65 have accounted for the vast majority of those needlessly killed under a deliberate policy of social murder. The financial oligarchs regard the retired, who do not contribute to surplus value and profit, as a drain on their wealth, and the NBER study provides a numerical estimate of the “benefit” of COVID deaths for the finances of the capitalist system.

One should recall the notorious 2014 article, “Why I hope to die at 75,” written by Ezekiel Emanuel, where he claimed society would be better off if the elderly simply just died “swiftly and promptly.” The oncologist brother of Rahm Emanuel, former White House chief of staff and mayor of Chicago, Ezekiel Emanuel held office as Chief of the Department of Bioethics at the National Institutes of Health Clinical Center and was named by President-elect Joe Biden as a member of his COVID-19 advisory board. In a 2019 interview, he directly stated that older Americans were no longer useful members of society and questioned “whether our consumption is worth our contribution.”

As the World Socialist Web Site noted in a December 2022 perspective on the disproportionate elderly victims of the pandemic, “The implementation of a policy that accepts and even promotes mass death among a physically vulnerable section of the population has no modern precedent in a country claiming to be democratic. The dismantling of serious and systematic public health measures to stop the spread of COVID is viewed by powerful sections of the ruling class as an effective means of reducing the societal ‘burden’ of caring for large numbers of elderly people.”

Consideration of the NBER study leads us back to the chaos at HHS. The vacancies being created in the federal institutions of public health will be filled by droves of vaccination and public health contrarians with the mindset of completely dismantling decades of scientific gains that have been made over the last two centuries. 

The long-term implications are profound. The stifling of the next generation of scientists and public health leaders means that the pipeline for innovation will dry up. As universities pause hiring and research labs face funding gaps, the US risks a slow-motion exodus of talent—a development that could permanently weaken the country’s capacity for biomedical research. In a time when new health threats are emerging globally, the weakening of domestic public health infrastructure not only compromises the lives of Americans, but endangers billions of people across the world.

In little more than a month after being sworn in as president of the United States, Donald Trump’s wrecking operation on the entire public health structure has provoked shock and dismay. The critical work by academics and scientists at the National Institutes of Health (NIH) on illnesses like cancer, diabetes and Alzheimer’s has been severely disrupted. The scouring of websites at the Centers for Disease Control and Prevention (CDC) is more than just censorship of an extreme nature. It will prevent public health experts from performing essential actions to protect the well-being of the population. 

Furthermore, parallel to the data purge, the drastic personnel cuts—nearly 5,200 employees at the CDC and about 1,200 at the NIH—only work to further undermine the entire health apparatus. Meanwhile, within days of Robert F Kennedy Jr.’s confirmation as head of HHS, it is clear he intends to remove personnel who are not aligned with his anti-vaccine and anti-public health vision. 

Senior officials from the Food and Drug Administration, NIH and CDC have resigned rather than work under the new regime. Employees describe a climate of fear and uncertainty, with many questioning whether the department’s deep institutional knowledge and scientific expertise will survive this radical restructuring.

In particular, Kennedy is eyeing a shakeup of committees responsible for vaccine recommendations. The postponement of the upcoming Advisory Committee on Immunization Practices (ACIP) where review of evidence on several vaccines and recommendations was to be had speaks volumes about these intents. President Dr. Tina Tan of the Infectious Diseases Society of America said in a statement, “Postponing a meeting of the Advisory Committee on Immunization Practices delays vital discussions and needed decisions on a variety of vaccines by trusted and well-vetted experts. ACIP relies on a well-established, transparent and evidence-based process for evaluating the optimal use of vaccines that plays a critical role in strengthening public health.”

Meanwhile, COVID remains at sustained levels across the country (668,000 daily infections) since before January, with approximately 1,000 deaths per week. One of the worst flu outbreaks since the 2009-2010 season has put more than a quarter million people into hospitals and killed over 11,000 people thus far. At the same time, one of the worst measles outbreaks seen in 30 years is taking place in Texas, predominately among children and teenagers. And, finally, there is the very real threat posed by the potential for bird flu to become a pandemic among human beings as well.

Gold price continues to reach record highs

Nick Beams

While it has not been immediately reflected in turbulence in financial markets, at least not yet, the escalation of US President Trump’s economic war against the rest of the world as he seeks to maintain the dominance of US imperialism is having an impact.

The Trump MAGA agenda has already sent a wrecking ball through the geo-political post-war order. This is exemplified in the remarks of the incoming German chancellor, Friedrich Merz, that it was necessary to pursue “independence” from the US because the American government was “largely indifferent to the fate of Europe.”

Gold bars on display at anexhibit at the American Museum of Natural History. November 8, 2006 [AP Photo/Seth Wenig]

While the impact on the financial system is not so apparent, it is clear that beneath the surface, tensions and contradictions are building up. One of the clearest expressions is the escalation in the price of gold.

Since the beginning of 2024 it has increased by 44 percent, with an 11 percent increase this year. The gold price is now just below $3,000, a record high, with predictions that it could soon go to $3,500 or even higher.

Among the reasons cited for the increase is the uncertainty created by the sweeping tariffs being threatened against friend and foe alike by the Trump regime. As James Steel, precious metal analyst at the global bank HSBC, told the Financial Times: “When trade contracts, gold takes off. The more tariffs that go on, the more this is going to disrupt world trade, and the better it will be for gold.”

The drive for gold has led to scenes previously not previously imagined. Traders have been physically shifting gold out of London, the main trading hub for the precious metal, into New York. The rush has resulted in a weeks-long queue to get gold out of London vaults, upending the commitment by the London Bullion Market Association to make deliveries within two or three days.

Such has been the movement that the Bank of England governor, Andrew Bailey, had to offer the reassurance earlier this month that there was “still plenty of gold.”

In testimony to the UK Treasury Committee, he spoke about the gold exodus from London. “Please, this is not a big thing really. Gold doesn’t play the role it used to play. So if we had been having this discussion 100 years ago we’d have been in some very different world because we were on the gold standard.”

Such reassurances, however, do not address the question of why under the current system of fiat currencies, there has been a turn to gold in the recent period and why has it been led by a number of central banks. Fiat currencies prevailed after President Nixon cut the link between the US dollar and gold on August 15, 1971.

In a report on gold demand issued earlier this month, the World Gold Council, the main industry body, said gold demand in 2024 had hit a new record of $382 billion, including $111 billion just in the last quarter of the year.

The report said central bank demand and emerging market demand was the biggest driver of the increase, with purchases exceeding 1,000 metric tons of gold for the third year in a row.

“Geopolitical and economic uncertainty remains high in 2025 and it seems as likely as ever that central banks will once again turn to gold as a stable strategic asset,” the report said.

China and Poland have been among the major buyers and their demand is expected to continue.

While the Trump trade warfare is adding to economic and financial uncertainty, the rising demand for gold did not start with his election win and tariff blitz.

One of the key factors was the Biden administration’s freezing of $300 billion of the assets of the Russian central bank at start of the Ukraine war. Coupled with the exclusion of Russia from the international payments system, enforced because of the role of the US dollar as the global currency, this sent a shock through the global financial system.

Governments and their central banks were suddenly confronted with the reality that dollar supremacy meant that they too could be subject to similar sanctions if they crossed the path of the US.

In response to the events of 2022, initiatives have been undertaken, particularly by the BRICS group of countries—comprising initially Brazil, Russia, India, China and South Africa and since joined by a number of others—to try and devise an alternate payments system for trade and investments.

These measures have only been small scale so far, but they have attracted the ire of Trump and brought significant threats.

At the end of last month, Trump repeated the warning, he made in November.

In a post on his Truth Social platform, he said: “We are going to require a commitment from these seemingly hostile countries that they will neither create a new BRICS currency, nor back any other currency to replace the mighty US dollar, or they will face 100 percent tariffs.”

Any country that tried to replace the dollars should say “hello to tariffs, and goodbye to America.”

The maintenance of dollar supremacy is an existential question for US imperialism. It is the role of the US dollar as the global fiat currency that enables it to run up huge budget deficits in a way not possible for any other country.

Its significance was underscored by Trump during the election campaign when he said that losing dollar supremacy would by the equivalent of losing a war.

At the same time, the gyrations of the Trump regime are fueling global uncertainty. On the one hand it is asserted that the high value of the dollar is one of the key factors in the trade deficits of the US and is undermining the US industrial base via cheaper imports. On the other hand Trump insists that dollar supremacy must be maintained, implying a stronger dollar, with tariffs pushing up its value in global currency markets.

The conflicting consequences of these policies, which the Financial Times characterised as “bizarrely contradictory,” are replicated with regard to crypto currencies. Trump has said he wants to make US the crypto capital of the world. Yet one of the stated aims of the crypto proponents is the development of a system operating outside the fiat currency system.

There are many immediate factors contributing to the gold price rise, including tariffs, interest rate rises, inflation, concerns over the stability of US government debt, now at $36 trillion and rising, as well as greater geo-political uncertainty, including the threat of world war.

But these proximate causes have the character of an initial expression of a deeper process rooted in the very nature of the capitalist monetary and financial system.

Bourgeois economists, along with many who consider themselves to be Marxists, have dismissed Marx’s analysis of the commodity (gold) basis of the monetary system as belonging essentially to the 19th century. The final blow to its validity, they say, came when the system of fiat currencies was established after President Nixon removed the gold backing from the US dollar on August 15, 1971.

In putting forward these claims, they never explain why central banks continue to hold gold and why they have been acquiring it in recent times.

The fundamental difference between gold and all fiat currencies, including the US dollar, is that gold is a commodity produced by human labour and does embody real value.

Marx never claimed that a system of fiat currencies and the system of credit erected upon it could not drive out gold and replace it even for a considerable period of time, as has occurred since 1971.

In fact, he maintained that this was an inevitable tendency of capitalist development.

Credit, he wrote, being a social form of wealth, “displaces money [that is gold] and usurps its position. It is confidence in the social character of production that makes the money form of products appear as something merely evanescent and ideal, as a mere notion.” (Marx, Capital Volume 3, Penguin, 707-708)

Capitalist production, he continued, “constantly strives to overcome this metallic barrier, which is both a material and an imaginary barrier to wealth and its movement, while time and again breaking its head on it.”

It is not possible to ascertain exactly how the contradictions in the fiat currency system will develop, but the rise in the price of gold amid concerns about the stability of the US dollar, the fiat currency in chief, are indications that the time when the capitalist financial system once again breaks its head may well be approaching.

Brazil’s former President Jair Bolsonaro indicted for fascist coup attempt

Tomas Castanheira

Brazil's former President Jair Bolsonaro and commanders of the Armed Forces, Adm. Almir Garnier Santos, Army Gen. Paulo Sergio Nogueira and Air Brig. Lt. Carlos de Almeida Baptista Junior. [Photo: Marcos Corrês/PR]

On Tuesday, the office of Brazil’s Attorney General (PGR) indicted former President Jair Bolsonaro and 33 others for the attempt to stage a coup d’état and violently abolish the democratic rule of law in a plot that led to the January 8, 2023 fascist uprising in Brasilia.

Once the indictment is accepted by the Federal Supreme Court (STF), which is expected to happen within the next few weeks, the accused will become defendants in a criminal case, facing sentences of up to 30 years in prison.

The indictment against Bolsonaro and his accomplices is based on the vast body of evidence gathered from the Federal Police’s (PF) almost 900-page report, published in November of last year.

The evidence paints a sinister portrait of the military-fascist cabal that headed the Brazilian state under the Bolsonaro government, whose deep roots in the Armed Forces cannot be hidden. Among those accused by the PGR are 23 military personnel, including seven generals and former commanders of the Armed Forces.

The PGR concluded that this group is responsible for systematically leading a “conspiratorial plot armed and executed against the democratic institutions.”

The conspiracy to establish a dictatorship in Brazil began well before the 2022 elections, as the report points out. Its initial focus was on abolishing the division of powers, establishing absolute powers for the Executive and attempting to discredit Brazil’s electoral system.

A substantial part of the evidence uncovered by the PF came from the plea bargain of Col. Mauro Cid, Bolsonaro’s aide-de-camp, who was responsible for coordinating the coup actions between the Planalto presidential palace and the military.

Cid clarified that, after Bolsonaro’s defeat in the 2022 elections, the former president and his allies launched a systematic plan to overthrow the elections, establish a state of exception that would place power in the hands of the military and prepare the legal bases for the establishment of a dictatorship.

These plans—described in detail in documents seized from the accused—included the assassination of the president-elect, Luiz Inácio Lula da Silva of the Workers Party (PT), his vice presidential running mate, Geraldo Alckmin, and Minister Alexandre de Moraes, then president of the Superior Electoral Court (TSE).

A document titled “Green and Yellow Dagger,” written by Gen. Mario Fernandes, one of the coup’s main conspirators, raised different possibilities for carrying out the assassinations, including through the use of firearms, explosives or poison. The document was presented and approved by Bolsonaro’s vice presidential candidate, Gen. Walter Braga Netto, on November 12, 2022.

On December 15, an attempt to carry out the plan to assassinate Moraes was launched and aborted. The operation was conducted by members of the army’s special forces, the so-called “Black Kids,” and directly financed by Braga Netto.

This and other violent episodes—including a wave of attacks on public buildings and vehicles in Brasilia on December 12, during the event to make Lula’s victory official—and the demonstrations by Bolsonaro supporters in front of the barracks had the declared aim of serving as “trigger events” prompting the decree of a state of exception that would transfer power to the military.

While those actions did not provide the necessary “trigger events for the action of the Security Forces,” mentioned by General Fernandes in a message to the commander of the Army, Gen. Marco Antônio Freire Gomes, the attack on the headquarters of the Three Branches of Government on January 8, 2023 fit perfectly within these objectives.

While organizing these violent actions, Bolsonaro and his co-conspirators acted systematically to pressure the vacillating elements in the Armed Forces command to join the coup, including by inciting an uprising among lower ranking officers.

In the period between Bolsonaro’s electoral defeat in October and the end of December, the former president and his defense minister, Gen. Paulo Sergio Nogueira de Oliveira, held multiple meetings with the commanders of the Armed Forces in which they discussed their coup plans in detail. This was confirmed by the Army and Air Force commanders themselves to the Federal Police.

Bolsonaro also met privately with Gen. Theophilo de Oliveira, commander of the Army’s most critical division, the Land Operations Command (COTER), who made its troops available to carry out the coup.

Between Bolsonaro’s meetings with the commanders, the Armed Forces published a false report on their counting of the ballots, fabricating the conclusion that the electoral process was subject to fraud. Two days later, on November 11, the commanders issued a joint statement promoting the fascist demonstrations demanding a military coup as “popular demonstrations.” Threatening authorities who interfered with those demonstrations, the note claimed the “unrestricted and unwavering commitment [of the Armed Forces] to the Brazilian people” and its historic role as a “moderating” power.

Although the PGR complaint identifies these two episodes, which involve the entire military command, as central parts of the coup plan, responsibility for them is attributed exclusively to former President Bolsonaro. The only military commander accused is Navy Adm. Almir Garnier, who insisted until the last moment on carrying out the coup.

“It should be noted,” the prosecutor misleadingly concludes, “that the Army itself was a victim of the conspiracy.”

Bolsonaro’s trial and the political crisis in Brazil

According to the press, Justice Alexandre de Moraes and the First Panel of the STF are now working to ensure that the trial of Bolsonaro and his co-conspirators is conducted swiftly, so that it can be concluded before the start of the 2026 election year.

The Workers Party (PT), for its part, is acting with the express aim of preserving the “technical” character of the trial of the fascist conspirators and avoiding its “politicization.”

These hopes are both unrealistic and reactionary. The crimes before the court are of an absolutely political and historical nature. The attempt to conclude this process, which has been going on for two years in secrecy, bureaucratically and behind the backs of the population, is an expression of the immense fragility of Brazilian democracy.

The PT’s pusillanimous attitude towards the coup trial, which directly targeted its government and its main leaders, is consistent with its actions throughout the process.

In the critical period between the election results and the January 8 uprising in Brasilia, while Bolsonaro and his military-fascist gang were staging provocations and plotting to overturn election, the PT sought to appease and negotiate with the forces involved in the coup plot and to convince the Brazilian population that the political crisis was resolved.

The president of the PT, Gleisi Hoffmann, emphatically opposed confrontations that emerged spontaneously from workers against the fascists blocking roads. Hoffmann warned the working class that “the president of Brazil at this moment is Jair Messias Bolsonaro. ... He must resolve this.”

Over the last two years, Lula and the PT have sought to strengthen their relations with the military by channeling increasing resources to the Armed Forces, promoting a right-wing nationalist ideology and acting to rehabilitate the military’s public image. This has included a crucial effort by the Lula government to erase the memory of the 1964-85 military dictatorship and its historic crimes, which are continued in the recent coup plot.

The undeniable return of the military-fascist presence in Brazilian politics is a demonstration of how none of the fundamental issues that led to the CIA-sponsored coup in 1964 and the subsequent two decades of dictatorship have been resolved.

The civilian regime consolidated by the 1988 Constitution preserved the pillars of the bourgeoisie’s violent domination unshaken and ready for a new authoritarian turn. The murderous military commanders were never punished and continued to educate new generations of officers based on their rabid anti-communist ideology and the cult of the “1964 Revolution.”

Jair Bolsonaro is the most authentic product of these conditions. A young officer in the transition period of the regime, he developed a parliamentary career as a strident defender of the dictatorship’s most brutal crimes and a public spokesman for the fascist ideology that for decades was restricted to the barracks.

Bolsonaro’s rise to the presidency of Brazil in 2018 was no accident. It marked a decisive return of the military to the center of the country’s politics, driven by the explosive sharpening of social contradictions, which could no longer be contained by the established instruments for suppressing the class struggle, the main one being the PT and its affiliated unions.

While the PT and the pseudo-left, who are completely detached from and hostile to the interests of the working class, are shaping their political strategy around the need to preserve the rotten institutions of the bourgeois capitalist state, the fascists are aggressively preparing for a new offensive to take power.

In response to the legal siege, the fascist forces linked to Bolsonaro are mobilizing their supporters to take to the streets and revive the banners that they raised in their first coup attempt. They have called national demonstrations for March 16, reaffirming that the 2022 elections were rigged and that they face political persecution from an authoritarian and illegitimate “leftist” regime.

The Brazilian fascists feel significantly emboldened by the return of Donald Trump to the White House. The coup plot in Brazil was in the most fundamental sense a political continuation of the coup attempt orchestrated by Trump on January 6, 2021. Bolsonaro and his allies closely coordinated their actions with Trump’s fascist political circle and modeled their actions on the political strategy of the US coup and its lessons.

The former president’s son, Eduardo Bolsonaro, who was in Washington in January 2021 to study the lessons of Trump’s fascist coup, is back in the United States, where the next steps of the Brazilian fascists are being decided. Last week, Eduardo posted on X the accusation that former US President Joe Biden financed a fraudulent Brazilian electoral process in 2022 with USAID money. This fabrication was immediately endorsed by Elon Musk.

An even more significant political statement was made by Trump himself. He responded to the charges against Bolsonaro and his fascist cabal by issuing a lawsuit against Judge Alexandre de Moraes through the Trump Media & Technology Group alongside the fascist social network Rumble. The lawsuit alleges that Moraes is violating the First Amendment by demanding the suspension of accounts of Bolsonaro supporters residing in the US.

The accusation by Bolsonaro’s supporters that the Biden administration financed Lula’s victory by means of electoral fraud is a complete lie. On the other hand, there are multiple reports that US state officials held a series of discussions with Brazilian military leaders to dissuade them from participating in a Bolsonaro coup. Those talks were not motivated by any kind of international “left-wing” agenda of the Biden administration but on the understanding that a coup d’état in the largest country in South America would provoke a destabilization detrimental to the interests of US imperialism in the region.

The return of a second Trump administration marks a sharp turn in US foreign policy, with the prioritization of confrontation with China as a main axis. This includes the aggressive pursuit of US imperialist domination of Latin America and repelling the ever greater dominance of Chinese economic influence in the region.

The political relations of Trump-Musk and Bolsonaro are directly linked to the pursuit of these goals. Bolsonaro recently told the Brazilian newspaper Folha de São Paulo that, if he were to win the 2026 election—which he is legally barred from running—he would withdraw Brazil from the BRICS and allow the installation of an American military base on the country’s triple border as part of a “bold military agreement” with the US.

In a revealing speech at the CPAC conference on Thursday, Eduardo Bolsonaro argued that his father is being judicially persecuted because he is “the only candidate capable of defeating the left in the 2026 election” and “if he is kept out of the race, Brazil will fall completely under China’s influence.” He added: “With over 200 million people, the largest economy in Latin America and the land mass nearly the size of the United States, its geopolitical and economic importance is undeniable.”

Worsening unemployment, hunger and homelessness in New Zealand

Tom Peters

The “State of the Nation” report released last week by the Salvation Army charity in New Zealand revealed an appalling social crisis, driven by rising unemployment, low wages and high living costs.

Using brutal austerity measures, including mass redundancies and wage freezes across the public sector, the far-right National Party-led government is imposing the burden of the economic recession on working people. At the same time, it is cutting taxes for the rich and preparing to divert billions of dollars to the military, to fully integrate the country into US war plans against China.

Unemployment increased by 33,000 people last year to reach 156,000, or 5.1 percent—the highest level since September 2020. It is forecast to reach 5.5 percent by the middle of the year. As well as cuts to healthcare and other public services, factories including paper mills and meatworks have closed down, devastating entire towns.

Real unemployment is far higher than the official figure, which only accounts for people actively looking for work. By the end of 2024 more than 409,000 people were receiving some form of welfare payment, 12 percent of the working age population.

There is growing poverty among working families. New Zealand’s gross domestic product per capita declined by 2.7 percent in the year to September 2024, and the Salvation Army notes that 37 percent of the workforce received no pay increase.

The government is driving down wages for the lowest-paid workers. It recently announced that the minimum wage will go up by just 35 cents per hour or 1.5 percent in 2025, half the annual increase in household living costs.

Foodbank in Invercargill, December 2024 [Photo: Facebook/Harcourts Invercargill]

The Salvation Army reports that “there has been a sharp rise in food insecurity over the past two years, and it reached the highest level for more than a decade in the year to June 2024.” The demand for food parcels is 40 percent higher than before the COVID-19 pandemic.

More than one in four children live in households that run out of food sometimes or often. In Pacific island families, the most impoverished section of the working class, 55 percent of children are going without food sometimes or often.

The government has made cruel cuts to emergency hardship payments for food and other necessities. According to the “State of the Nation” report, “The total value of government hardship support payments declined by around $180 million during 2024.… The number of grants was down by around 11 percent, and the dollar value reduced by 18 percent.”

Food banks are also getting less government funding. In 2023, during the previous Labour Party-led government, a record 600,000 people a month were relying on foodbanks—11 percent of the population. The New Zealand Food Network reported that last year charities experienced a 30 percent decline in the number of people they are able to assist.

Funding for school lunches has also been reduced, from $8 to $3 per meal, resulting in less nutritious and often revolting meals being delivered to hundreds of thousands of children in low-income areas.

Growing numbers of welfare recipients are having their payments reduced under a harsher sanctions regime, which penalizes people for failing to attend appointments and fill out forms on time. The Salvation Army notes there were “45,825 benefit sanctions imposed on people receiving welfare support during 2024, which was close to double the 25,329 sanctions in the year to December 2023.”

Homelessness is deeply entrenched and getting worse. Last month the government boasted that the number of households living in motels used for emergency housing has fallen from 3,141 to 591 in the past year. Associate housing minister Tama Potaka said this meant more people were “now living in better homes.”

In reality, the drop follows stricter criteria for accessing emergency housing, which the Salvation Army says has likely contributed “to rising street homelessness and housing insecurity.” Auckland Council, for example, reports that while the number of people in the city’s emergency housing has plummeted, the number sleeping in cars and on the street soared by 53 percent in just four months, from 426 in September 2024 to 653 in January 2025.

The opposition Labour Party has feigned outrage over the government’s cuts and the worsening social crisis. Its finance spokesperson Barbara Edmonds said the National Party had “promised a better economy, but all we’ve seen is an economic downturn, rising unemployment, and the sharpest recession, excluding COVID-19, in 30 years—all of which happened under National’s watch.”

This is sheer hypocrisy. The 2017–2023 Labour government—supported by the Greens—used the pandemic to transfer tens of billions of dollars in public funds to the rich and corporations. Then, in 2022, the Reserve Bank began raising interest rates with the explicitly stated aim of triggering a recession and driving up unemployment, to increase the exploitation of the working class. This agenda was enforced by the union bureaucracy, which suppressed and betrayed struggles by teachers, healthcare workers and others.

Labour lost the October 2023 election in a landslide, after it campaigned for cuts to public spending, removed all restrictions on the spread of COVID-19 and supported Israel’s genocidal onslaught against Gaza.

As unemployment escalated in 2022–2023, the number of children living in households below the poverty line increased from 166,200 to 202,100. The number of people classed as “severely housing deprived” also increased under Labour from 99,462 in 2018 to 112,496 (2.3 percent of the population) in 2023.

Thousands of teenagers dropped out of study and took on jobs to support their families. According to the Salvation Army report, the rate of people leaving high school without any qualification rose from 10.6 percent in 2020 to 16.2 percent in 2023.

Only 37.8 percent achieved a university entrance-level qualification in 2023, the lowest figure in a decade. In poorer areas, just 13.7 percent of students achieved university entrance or higher.

At the same time, mental health problems have surged among young people. A Ministry of Health survey shows that the proportion of people aged 15 to 24 experiencing “high or very high levels of psychological distress” nearly doubled from 13.3 percent in 2017 to 22.9 percent in 2024.

Coalition talks between the conservative ÖVP and far-right FPÖ in Austria have failed

Markus Salzmann

Herbert Kickl, leader of Austrian Freedom Party (FPOE), gestures during the traditional FPOE May day event at the Urfahraner fair in Linz, Austria, Wednesday, May 01, 2024. [AP Photo/Christian Bruna]

Coalition government negotiations between Austria’s far-right Freedom Party (FPÖ) and the conservative People’s Party (ÖVP) have failed.

The collapse in talks was announced by FPÖ leader Herbert Kickl after a meeting with Federal President Alexander Van der Bellen in Vienna last Wednesday. The FPÖ won the federal election in September last year with 28.8 percent of the vote, against 26.3 for the ÖVP. With Kickl unable to secure a coalition agreement, the Alpine Republic still has no government more than four months later.

Immediately after the announcement, Van der Bellen invited the party leaders of the ÖVP, Social Democrats (SPÖ), Greens and Neos (New Austria and Liberal Forum) to his Hofburg official residency to explore the possibilities for new negotiations. He emphasised the urgency of establishing a stable government as quickly as possible.

The options are new elections, from which the Freedom Party would be the only party to benefit according to current polls, the formation of a minority government dependent on securing vote by vote support from parliament, the convening of a technocratic “government of experts” or a further attempt to form a coalition without the Freedom Party.

According to press reports, the ÖVP and SPÖ resumed discussion on a possible coalition on Monday. “Talks are ongoing on whether or not cooperation and the conclusion of a government agreement are possible,” said the ÖVP. The SPÖ, which came third in the election, also confirmed the talks.

An alliance between the ÖVP and SPÖ would have a majority of only one vote in the National Council (lower house of parliament). In January, negotiations between the ÖVP, SPÖ and Neos on budget issues had failed. Regardless of whether the ÖVP and SPÖ form a government or whether there will be a different government coalition or new elections, social cuts, anti-refugee agitation and increasing military spending will be at the centre of the government’s agenda.

This became clear after the tragic knife attack in the southern Austrian town of Villach on Saturday, in which a 14-year-old was killed and five others injured. Although no reliable information was available about possible motives, the fact that the suspect was a 23-year-old Syrian immigrant with a valid residence permit was enough to launch an aggressive smear campaign against refugees. Representatives of all parties vied with each other to call for tougher punishments and deportations.

“Lock up and deport” is now the motto, said acting Interior Minister Gerhard Karner (ÖVP). He also announced that, with immediate effect, there would be “massive random checks” across the country. Cynically, Karner justified this far-reaching measure by saying that the perpetrator had not previously come to the attention of the police.

The FPÖ and ÖVP had already agreed on much of the future government’s agenda, which would include far-reaching cuts in the social, health and education sectors. They had already agreed to adopt the FPÖ’s programme in full when it came to refugee and asylum policies. They had also agreed on a far-reaching expansion of the security authorities and a massive increase in their powers.

If the FPÖ is not included in the government after all, it is not because of its racist, inhuman policies and the fact that the party has close ties to neo-Nazi circles. And it is also not because of its demand to destroy the last remnants of the welfare state and enforce this against all opposition in the population.

The reason is the FPÖ’s relationship with Russia, which is perceived in Austria and the EU as an obstacle to a further military escalation in the context of the NATO war in Ukraine.

The trigger for the talks to fall apart was the FPÖ’s demand to lead the Interior Ministry and the Finance Ministry. In particular, the claim to head the Interior Ministry triggered fierce tensions, since this ministry controls the secret services.

In order to avoid jeopardising the coalition agreement, the ÖVP proposed that the FPÖ be given its own asylum and migration ministry as a concession. In return, the ÖVP would head the interior ministry with control over the security authorities and secret services.

On Wednesday, ÖVP leader Christian Stocker stated that foreign partners had issued very clear warnings that Austria would be excluded from the international flow of information between secret services if the FPÖ were to gain control over the secret services. According to Stocker, foreign representatives had made this very clear even before the elections.

Konstantin Kuhle, deputy leader of the Liberal Democratic Party (FDP) parliamentary group in Germany and a member of the parliamentary intelligence oversight committee, had already told finance daily Handelsblatt shortly after the October elections that if the FPÖ entered government, Germany would also have to “reevaluate its intelligence cooperation with its neighbour.”

The chairman of the secret service committee, Konstantin von Notz of Germany’s Green Party, expressed a similar view. “In times of a war of aggression in Europe that is contrary to international law and massive influence and disinformation campaigns, especially from Russia, the FPÖ in government would certainly be a considerable security problem for Austrian authorities, but also for its partners,” von Notz told Handelsblatt.

When Kickl was Interior Minister under Chancellor Sebastian Kurz (ÖVP) from 2017 to 2019, he authorised a raid on the intelligence service BVT (Federal Office for the Protection of the Constitution and Counterterrorism). This was carried out by a police unit under the command of an FPÖ official. What happened to the files and data seized at the time remains unclear to this day.

At the same time, a secret unit was set up under Kickl, staffed with FPÖ cadres. It was later revealed that this unit worked closely with Russian services. In the wake of these events, in 2018, the BVT was excluded from the so-called Bern Club, an informal association of Western domestic intelligence services. The successor organisation of BVT is currently working on a renewed approach to the association.

The FPÖ’s Eurosceptic stance and its call for an end to sanctions against Russia have already caused conflicts between the parties in the past. The FPÖ opposes the EU sending arms to be used against Russia. It also maintains a friendship treaty with the pro-Putin party United Russia and numerous high-ranking FPÖ members have close personal contacts in the Kremlin.

In this context, tensions over the “Sky Shield” missile defence system resurfaced during the coalition negotiations. Launched by Germany in 2022, this joint missile defence and airspace data exchange project now involves 21 European nations. Although neither a NATO nor an EU project, it is clearly aimed at further escalating the war against Russia.

In the context of the growing conflict between the US and Europe, the implications of a possible FPÖ government within the EU are also being viewed with concern. Harald Vilimsky, an FPÖ member of the European Parliament, welcomed Trump’s initiative to negotiate directly with Russia, describing it as a “historic opportunity” that deserved “the highest respect.” Vilimsky said that the negative reaction of EU leaders to this development was therefore all the more incomprehensible.

Trump’s announcement that he would negotiate with Putin over the heads of the Europeans has further exacerbated the crisis within the EU and there are growing calls for a strong and united Europe to assert European interests not only vis-à-vis Russia but also against the US. The FPÖ’s orientation towards Trump and Putin is seen as an obstacle in this regard.

Norway’s coalition government breaks down amid dispute over energy policy

Jordan Shilton

Prime Minister Jonas Gahr Støre with Ukrainian President Volodymyr Zelensky in July 2022 [Photo by President of Ukraine / CC BY-NC-SA 4.0]

Norway’s Labour Party-Centre Party coalition government broke up late last month over differences on the further integration of the country’s energy policy with the European Union (EU). Amid a rapid spike in home energy bills in parts of the country, driven by Norway’s role as a major energy exporter to Europe and increased demand across the continent, the rural-based Centre Party (SP) left the government and is campaigning for Oslo to take back more control over energy policy.

Labour Party (AP) leader and Prime Minister Jonas Gahr Støre headed the coalition with the SP since the AP’s 2021 election victory. Since elections cannot be held early under Norway’s constitution, Støre will continue to serve as head of a minority Labour government until September, the first single-party government in Norway in 25 years. He recruited former NATO Secretary General Jens Stoltenberg, who served twice as Prime Minister in AP-led governments between 2000 and 2013, to be finance minister.

The breakup of the coalition government followed on the heels of sharp energy price spikes late last year, especially in the country’s south. These shocks, which saw energy production costs rise as high as 13 kroner (€1.1) per kilowatt-hour, have their roots in Norway’s energy deregulation during the early 1990s and were fueled by the country’s close integration into Europe-wide energy markets. The price rises produced mounting popular disaffection with the government, which has focused on massive defence spending increases as it oversees the transformation of Norway into a key staging ground for US-NATO aggressive military operations against Russia.

While no expense will be spared on equipping Norway to serve as a junior partner of the imperialist powers in their wars of plunder, broad sections of the population confront high energy prices and a rising cost of living.

The immediate issue that led to the coalition’s breakdown was a proposal by Labour to adopt directives under the EU’s fourth energy package, which was finalised in 2019. Norway is not an EU member, but as a member of the European Economic Area (EEA), which grants free trade access to EU markets for Iceland, Liechtenstein, and Norway, Oslo is obliged to enact many EU legal provisions into national law. The SP denounced the government for giving up Norwegian control over energy policy and insists that Oslo should refuse to approve the directives.

The nationalist critics used the legal directives as a pretext, since they relate to renewable energy targets and building regulations for energy efficiency with which Norway already largely complies. They argue that connecting Norway’s power grid with Germany and Britain by undersea cables has sharply increased prices, and that this trend will accelerate if the EU’s control over energy policy expands and market-based energy prices continue to apply. Calls have been made for cables with Denmark and Britain to be cut in order to guarantee affordable prices in Norway.

While energy deregulation and Norway’s integration into a Europe-wide corporatised energy market have undoubtedly opened up Norwegian households to higher energy bills, the nationalist arguments ignore the fact that energy prices across the continent have also skyrocketed due to the imperialist-backed war on Russia. The sharp reduction of natural gas imports by the European powers from Russia has driven up prices across the continent, forcing a turn to more expensive imports, including from the US. Continent-wide demand has also spiked for Norway’s considerable energy resources, including its natural gas and hydro power that generates most electricity for households. To cite just one example, electricity prices for German households in the second half of 2023 were 20 percent higher and gas prices 22 percent higher compared to a year earlier.

The correct response to this development is not national isolationism, but a turn by Norwegian workers to their class allies across Europe, whose living standards are also declining under conditions of war and capitalist crisis. An international movement in opposition to the imposition of the cost of militarism and war on the backs of the working class in all countries must be based on a socialist programme.

Politically, the whipping up of nationalist sentiment towards the EU over the energy question by the SP plays into the hands of the far-right Progress Party (FRP) and right-wing Conservatives (Hoyre), who could establish a government after September’s election. The AP is currently at third place in the polls, behind the Conservatives and the FRP, who governed together between 2013 and 2020, the first time that the far-right party served in a Norwegian government.

The fact that the Conservatives and far-right FRP can benefit from the energy-price spike is above all due to the AP’s right-wing record. Under Stoltenberg’s leadership, the party embraced the right-wing, anti-immigrant chauvinism pioneered by the FRP, and Støre’s government has continued where its right-wing predecessor left off on strict public spending controls, while making available substantially more for the military. Støre has sought to win back some popular support with a proposal to cap household energy prices at 0.4 kroner per kilowatt-hour, but this is only scheduled to take effect on 1 October, i.e., after parliamentary elections in September.

Norway is a country with considerable wealth, with its Government Pension Fund Global (GPFG), better known as the oil fund, worth an estimated $1.7 billion. It holds approximately 1.5 percent of all shares of listed companies in the world, giving the Norwegian ruling class significantly more clout in the financial markets than the country’s population of 5.3 million would suggest.

But the use of the fund is strictly regulated to ensure public spending austerity and stable profit-making conditions for big business. The government can only use a maximum of 3 percent of the fund’s total value in each year’s budget, a figure set under the Conservative-FRP government in 2017. This framework, continued by the current AP government, has produced growing social inequality and increasingly stretched public services. A report by Norway’s Central Statistics Bureau (SSB) in September 2024 revealed that income inequality grew between 2016 and 2022 by 5 percent. The Gini coefficient, an internationally recognised scale for measuring levels of social inequality in society, with 0 representing absolute equality and 1 representing absolute inequality, rose from 0.358 to 0.375 when income from wages and capital investments were included.

All parties in parliament, from the far-right FRP to the Socialist Left and ex-Maoist Red Party, agree that Oslo must massively expand its military spending. Last April, the parliament (Stortinget) unanimously passed a 12-year defence spending plan that includes an additional 600 billion kroner (€51 billion) in spending, which will see the defence budget almost double in real terms by 2036. Underscoring the unanimity within the political establishment on ensuring Norway is a frontline state in the imperialist powers’ war to subjugate Russia to the status of a semi-colony, the introduction to the long-term defence agreement prepared by the Standing Committee on Foreign Affairs and Defence declared, “The committee, members of the Labour, Conservative, Centre, Progress, Socialist Left, Red, Liberal, and Christian Democratic parties, considers that Norway needs a credible and deterrent military defense at a time characterized by a security policy gravity we have not experienced in a very long time.”

The Green Party, the ninth party in parliament, also supports the agreement but was not represented on the committee.

Norway was a founding member of NATO and a firm US ally, but sought throughout the Cold War to play a less provocative role, for example by refusing to allow foreign troops to deploy on its territory. All of this has now changed. Major military exercises involving thousands of NATO troops are a regular occurrence, especially in the country’s north, where cross-border operations with Sweden and Finland aimed at Russia take place often. In early 2024, Norway transformed its biennial “Cold Response” NATO exercise into “Nordic Response.” Taking advantage of Sweden and Finland’s recent NATO membership, “Nordic Response” involved 20,000 soldiers, and hundreds of ships and aircraft from the aggressive military alliance.

The 12-year defence package includes the purchasing of a fleet of at least five frigates and five submarines, accompanied by anti-submarine helicopters. The modernisation of the navy is seen is crucial by the military leadership and Oslo’s NATO allies, who expect Norway to expand its presence in the North Atlantic and on its Arctic coast to target Russia. With the Baltic Sea virtually controlled on all sides by NATO member states and access to the Mediterranean blocked by Turkey’s closure of the Bosporus to warships following the US-provoked Russian invasion of Ukraine, Moscow’s northern route along the Norwegian coast and into the Atlantic Ocean is one of the few remaining free passages to the open sea it enjoys.

Trump administration labels cartels as foreign terrorist organizations as CIA flies drones over Mexico

Andrea Lobo

US Air Force MQ-9 Reaper Drone [Photo: USAF, Tech Sgt. Jim Bentley]

The Trump administration officially designated eight Latin American gangs, including six Mexican drug cartels, as “foreign terrorist organizations” (FTOs) on Wednesday. This designation, traditionally reserved for politically motivated groups targeted by the Pentagon and CIA, allows for stricter sanctions and, under the ever-expanding interpretation of legislation that launched the “War on Terror” after 9/11, paves the way to military actions in Mexico and the broader region. 

Despite concerns in the corporate media that this move could harm trade and business relations globally due to fears of potential US prosecution and sanctions, the FTO designations are aimed at setting a precedent for ever-more predatory US foreign policies and military interventions. 

Revealing the wide net being cast by the decision, Trump’s initial executive order outlined the three main rationales for the designations: 1) the groups’ convergence with “antagonistic foreign governments”; 2) that they are “entities engaged in insurgency and asymmetric warfare”; 3) and their alleged “infiltration into foreign governments across the Western Hemisphere.” 

This framework makes clear that the FTO designations use the claim of countering drug trafficking and violent criminal organizations as a pretext for promoting war against geopolitical rivals, building up the repressive apparatus against working class opposition, and regime change operations. 

Additionally, the FTO designations open up another line of attack in the Trump administration’s war against migrants. US immigration law prohibits granting asylum to individuals who have provided material support to terrorist organizations, regardless of the circumstances. Migrants coerced into paying cartels for safe passage or those who have been victims of extortion might be deemed ineligible for asylum based on these interactions.

Even though the media and US officials repeatedly cite it as the main reason behind the escalation of operations against cartels, fentanyl and the tens of thousands of overdose deaths in America are not mentioned in Trump’s order. 

The designations coincided with reports by CNN and the New York Times of increased CIA-operated drone surveillance over Mexican territory. According to US authorities, the flights, utilizing MQ-9 Reaper drones, are aimed at monitoring cartel activities and locating fentanyl production labs in northern Mexico, with the intelligence gathered being shared with the Mexican government.

The expansion of drone surveillance began under the Biden administration, and has intensified under Trump, especially after the FTO executive order in January. Trump also appointed former Green Beret and CIA paramilitary officer, Ronald Johnson, as US ambassador to Mexico. 

Mexican President Claudia Sheinbaum responded to these reports on Wednesday insisting that there is “nothing illegal” about the CIA drone surveillance flights since they were agreed to by her predecessors. The flights were “part of the dialogue,” she said. 

But the lack of transparency surrounding these missions, which had never come to light before, suggests that they are part of the escalating US violations of international law. Each week brings new revelations or actions by the Trump administration reaching further toward a wide and indefinite presence of US forces in Mexico under the pretext of fighting the drug cartels and smuggling of migrants. 

Accordingly, Sheinbaum has expressed opposition to the FTO designations, viewing them as potential infringements on Mexican sovereignty, while at the same time advocating for calm and national unity along with increased cooperation and joint investigations with the US military and intelligence apparatus.

On Wednesday, Gen. Gregory M. Guillot, commander of the US Northern Command, which oversees operations in North America, and Gen. Ricardo Trevilla Trejo, the Mexican Army chief, met and signed a Joint Statement of Understanding on cooperation along the border. This followed the approval by the Mexican Senate green-lighting the deployment of a small group of US Special Forces into Mexico to train Mexican Marines for counter-cartel operations. 

On February 3, Washington agreed to suspend 25 percent trade tariffs against Canada and Mexico for 30 days in return for concessions, including the deployment of 10,000 troops by both countries to the borders with the United States. These concessions have not stopped Trump from including both neighboring countries in his planned global tariffs on aluminum and steel. 

US officials speaking anonymously with the Times gave assurances that the CIA has not yet been authorized to employ drones in lethal actions inside Mexico. 

However, billionaire Elon Musk, appointed by Trump to implement much of his economic agenda, responded to the FTO designations by writing on his platform X: “That means they’re eligible for drone strikes.” 

The Trump administration sees the consolidation of a Fortress North America subordinated to the geopolitical and economic diktats of the American ruling class as a precondition to advancing its strategic conflicts with Russia and China. As in the calls for Canada to become America’s 51st state and threats to seize Greenland and the Panama Canal, Trump seeks to subordinate Mexico politically to his fascist and neo-colonial agenda through threats of military and economic war.