If they had done it with tanks, we would call it a ‘military coup’. But they didn’t need to. The global political elite, echo-chambers of the bankers for a generation, did if for them. No tanks, no drama, no fanfare. Just the small print of an official communiqu√©.

It came at the end of the meeting of G20 finance ministers and central bankers in Busan, South Korea, on 4-5 June. There was only one big question: to cut or not to cut.

Until then, the G20’s response to the economic crisis had been to support moderate reflation – spending money to raise demand and stimulate growth. That meant governments borrowing money to do this. This was fine in the circumstances, had been the G20 view, because the danger was a faltering of the economic ‘recovery’ and a nosedive into a ‘double-dip’ recession.

Then, suddenly, last week, everything changed. How did the official communiqu√© put it? There is concern about ‘recent volatility in financial markets’ (speculators dumping shares, bonds, and currencies). This has highlighted ‘the importance of sustainable public finances’ (the need for cuts in public services). This especially applies to countries with ‘serious fiscal challenges’ (big government debts). They need to ‘accelerate the pace of consolidation’ (make big cuts now).

The G20, it should be explained, is the club of top nations meeting to discuss economic affairs. The members are: Argentina, Australia, Brazil, Canada, China, the EU, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK, and the USA.

Between them, they represent two-thirds of the world’s people and 85% of global production. For G20, then, read world capitalism. A G20 communiqu√© is the closest we get to an internal bulletin of the international ruling class.

The policy switch last week was therefore momentous. Veteran liberal economist Paul Krugman put it starkly: ‘The deficit hawks have taken over the G20.’

The new programme is happening already. Cuts packages that dwarf anything since the 1930s are now being rolled out across Europe.

The cuts are a direct response to the third phase of the global financial crash. After the credit crunch of 2007 and the bank crash of 2008, we now have the ‘sovereign debt crisis’ of 2010 – entire capitalist states threatened with bankruptcy.

The Irish meltdown in the immediate wake of the bank crash was an early portent of what was to come. But the third phase only went critical earlier this year when the international banks threatened to wreck the Greek economy unless the Papandreou government imposed massive cuts.

Since then, a deflationary wave has swept across Europe. Italy has frozen public-sector pay, raised the retirement age, and plans ‚Ǩ24 billion of cuts in 2011. Spain has cut public-sector pay by 5% as part of this year’s ‚Ǩ15 billion tranche of cuts. France has imposed a three-year spending freeze. Holland looks to be electing a hard-right ‘deficit-cutting’ regime.

German Chancellor Angela Merkel has announced a total of ‚Ǩ80 billion of cuts between now and 2014. ‘The crisis in Greece has shown the importance of good housekeeping,’ she announced. ‘Germany has a responsibility to set a good example.’

The planned Cameron-Clegg cuts fit this pattern of global deflation. The implications have been spelt out in a Chartered Institute of Personnel and Development (CIPD) report. They estimate the squeeze will put 750,000 public-sector workers on the dole and push total unemployment close to 3 million by 2012.

But that is not all. Tax revenues will fall and benefit payouts increase. That means two steps forward, one step back, when it comes to deficit reduction. So you can bet what little money you have left on them cutting the dole. A safe bet, because they have already said that is what they are going to do, announcing that their ‘spending review’ will ‘extend to the level of benefits and the range of people entitled to receive them’.

As for those in work, there will be cuts in pay and pensions. The economic implications are catastrophic. The deflationary impact will be comparable with 1931. The result will not be a ‘double-dip’ recession. It will be a full-blown depression.

You have only to pose the question, where will growth come from? The Cameron-Clegg answer is exports. You cut state spending and workers’ consumption, and instead you have factories working flat out to supply foreign orders, helped by a weak pound and lower wage-costs.

Orders from where exactly? Both exports and imports fell in April this year (the last month for which figures are available). This is before the impact of the massive new cuts packages just announced across Euro-land. China and Germany might manage some sort of export-led growth. But Britain? Booming exports to a deflationary Europe?

We appear to be entering an economic death-spiral. The global capitalist class is now committed to deflationary programmes of the kind that created the Great Depression. If we let them carry on, working people are likely to pay a terrible price. Cameron has said as much, declaring that the cuts will ‘transform’ British society.

So far, in Britain at least, the ruling class is winning the argument that there is no alternative. The new neoliberal voodoo is that we have to ‘live within our means’. How do they put it in the G20 communiqu√©? We have to ‘accelerate the pace of consolidation’ to achieve ‘sustainable public finances’. One can almost hear the voice of Herbert Hoover, US President in 1929, echoing down the decades: ‘sound money’, ‘balanced budgets’…

We have to break the spell. There is always an alternative. Cameron and Clegg want a ‘consultation’ on how to cut £6 billion from government spending this year. Here are some suggestions.

Stop the war ( £2.6 billion a year and rising). Abolish the Ministry of War – sorry, ‘Defence’ ( £37 billion a year). Decommission Trident ( £1 billion a year) and cancel Trident replacement ( £70 billion). Tax the rich (starting with the anticipated £90 billion in profits and bonuses that the UK ‘financial services industry’ is expected to earn in 2011).

Deficit sorted. With a lot to spare. So we can start a massive expansion of public services to create jobs, provide houses, improve hospitals, and begin the transition to a green economy.

You don’t even have to be a Marxist to argue it. It was that great liberal economist Keynes who explained that anything we can do we can fund.

The point is simple enough. Work creates wealth. So building houses, re-equipping hospitals, and insulating roofs create wealth. The demand for materials, the wages paid out, the returns for services, all have ‘multiplier’ effects: they stimulate more economic activity, which in turn stimulates yet more. Government deficits can then be paid back from the higher tax-revenues of economic growth.

Is it realistic? It is the class struggle that determines what is ‘realistic’. If we turn Britain into Greece, the alternative will be ‘realistic’. If we build a mass movement of British workers to fight the cuts, then cuts for the rich and spending for the public good will be on the historical agenda.

If we do not fight, we will pay. If we do, we can make them pay. Moreover, if we don’t fight – and the ruling class plunges us into a second Great Depression – the danger is that the price to be paid doesn’t stop with the poverty and stress of unemployment, pay cuts, and shrinking pensions. The 1930s show that yet darker shadows may lie ahead.

That is the significance of the 22 June – Emergency Budget Day. That is the day on which Cameron and Clegg formally launch their class war against working people. That is the day when the bankers’ government proclaims its cuts package.

It needs also to become the day when we, the Left, representing the interests of the great majority of working people, begin the fight-back. It needs to be a day of action and anger in Central London – and a foretaste, we must hope and intend, of what is to come.