Following last night's vote, there can now surely be no disguising the fact that the US political system is a plutocracy of, by and for the financial aristocracy, who continue to sit on vast piles of cash while jobs, working conditions are slashed to the bone and vital services are ended altogether. The overwhelming majority of Americans have been sickened and angered by the turn of events, with 72% of those polled describing the deal negatively, using words such as "ridiculous", "disgusting" and "stupid". Such figures should be no surprise; very few Americans will feel better off today than they did yesterday. This has been part two of the great American bank robbery.

Even before the budget decision, the outlook for US output looked extremely bleak. Since the financial crisis of 2008, the economy has almost flatlined, with anaemic growth figures and spiralling debt. In the long view, this reflects the structural and relative decline of the US as a world power. In the shorter term, the spike in debt can largely be attributed to the banker bailouts, tax cuts for the ultra-rich, and the cost of endless wars intended to offset the long term collapse.

According the corporate media mythology, the enormous cuts were made necessary because August 2nd was supposedly the day when the US government would no longer be able to pay its bills if the 'debt ceiling' had not been increased. However, the raising of the debt ceiling had previously been a technical matter, and it was President Obama who set the framework for the 'debate' - by tieing this procedure to extorting "something big" from the working class. A crisis atmosphere was very deliberately engineered - much like it was in the initial 2008 banker bailout - in order to steamroller that opposition.

Within Obama's framework, US politicians ranging from the 'liberal' wing of the Democratic Party to the 'Tea Party' Republican caucus discussed exactly what this "something big" must be. Obama himself conspicuously mooted a largely symbolic tax on corporate jets, in the fraudulent name of "equal sacrifice". But he bowed to inevitable Republican opposition to this measure, before shifting the debate far to the right of most Republicans by proposing cuts to Social Security - previously seen as the untouchable "third rail" of US politics.

Under last night's agreement, around one trillion will be cut from "discretionary spending" over the next ten years, with education, environmental protection, transportation and housing being the worst hit areas. In addition to this, a tiny bipartisan committee will identify an extra £1.5 trillion in cuts, with "entitlement programs" such as unemployment payments and healthcare help for the poor and elderly slated for the chopping block. However, it is estimated that - even should all these cuts be enforced - it would still take many decades for the US to pay off its debts. In the meantime, credit agencies can be expected to push for far more. And as TV pundit Keith Olbermann has pointed out, should there suddenly be any unexpected costs - such as yet another war for example - the bipartisan committee would now be obliged to offer up even more working class Americans for sacrifice.

As with George Osborne's savage cuts in the UK, the effect of these measures will be to depress the domestic economy even further - with incalculable consequences around the globalised economy. But this is precisely what the US ruling class intends.

Today, Obama is boasting that his Administration is delivering "the lowest level of annual domestic spending since Dwight Eisenhower was president" half a century ago - as if this was unambiguously a good thing for everyone. In truth - as the polls show many recognise - it is only a good thing for the moneyed elite, but then he is their president, and it is them he's relying on to get him back into power.

This morning, Nobel Prize for Economics winner Paul Krugman - himself a liberal former Obama supporter - commented that he's now "Got that 30s feeling, all the way". In that era, the Great Depression produced a huge working class uprising and a fascist ruling class response. The defeat of the working class led inexorably to the Second World War, and seventy five million dead. As we stand at another crossroads of history, one sign points to socialism, and the other to barbarism.