Disillusion is rapidly turning to discontent and open conflict.
asserted
Disillusion → turn → discontent
Over the weekend, demonstrators took to the streets across France, Spain, Portugal, Italy and Belgium, battling police, torching public buildings and looting shops.
asserted
demonstrators → take → shops
The scenes have mirrored events on the other side of the Atlantic, as the political chasm dividing America has grown, with outbursts of public anger against authorities gaining momentum.
asserted
outbursts → mirror → momentum
Across the developed world, including here in Australia, political momentum has shifted from the centre to the fringes in an increasingly bipolar world that, if it continues, ultimately will render any attempt at consensus futile.
asserted
attempt → include → consensus
Populist leaders, experts at whipping up fury for personal gain, are in the ascendancy despite offering little in the way of solutions.
asserted
leaders → whip → solutions
While the catalysts in each country may differ, the root cause largely is the same: the economy
The compact — the unwritten agreement — between workers and the democratic state is fraying.
uncertain
compact → differ → workers
Lower and middle-income workers feel they're going backwards.
asserted
they → feel → ?
And they're not imagining it.
asserted
they → imagine → it
Wages have not kept pace with inflation as asset prices have soared.
asserted
prices → keep → inflation
Property ownership in many Western nations is almost out of reach of ordinary workers while rents have skyrocketed.
asserted
rents → skyrocket → workers
That has concentrated wealth in an increasingly smaller cohort of wealthy households.
asserted
That → concentrate → households
The "cost-of-living crisis" has become a transnational phenomenon.
And as prices continue to surge, central banks have responded in unison by raising interest rates, piling further pressure on those already most affected.
asserted
banks → become → those
The cost of inequality is beginning to manifest itself.
asserted
cost → begin → itself
Why you feel poor
Here's a snapshot of why workers are angry.
asserted
workers → feel → ?
If you take inflation into account, Australian incomes are back to where they were in 2011.
asserted
they → take → 2011
There was the post-pandemic inflation hangover, piled on top of Russia's invasion of Ukraine, which sent energy prices into orbit that's now been followed by America's war in Iran.
asserted
that → be → Iran
The combination has not just obliterated income growth.
asserted
combination → obliterate → growth
It has sent it into reverse.
asserted
It → send → reverse
It's a story writ large across the Western world.
asserted
It → writ → world
Just how intractable the problem has become is on full display right here at home.
asserted
become → become → home
The opposition and a large posse of economic commentators point to federal government spending.
asserted
opposition → point → spending
It's firing up inflation, they argue, and driving interest rates higher.
asserted
they → fire → rates
But let's look at the domestic situation.
asserted
's → let → situation
There's not enough tax to pay for all that spending, and the shortfall, the deficit, must be funded by debt.
asserted
shortfall → be → debt
There are two levers you can pull here.
asserted
you → be → ?
One is raising taxes, which no-one will ever support.
asserted
one → raise → which
And the other is cutting spending, which no-one will ever support.
asserted
one → cut → which
From 2013 to the pandemic, Australia, a resource-exporting nation, ran up deficits during the greatest resources boom in history.
asserted
Australia → export → history
The government of the day decided to throw away a resources tax, a decision which has cost the country dearly.
asserted
which → decide → country
And to this day, we continue to sell our resources, charging a fraction of the taxes other nations apply.
asserted
nations → continue → taxes
In the meantime, lobbyists continually agitate for cuts to income and company taxes, even as we stare into the abyss of ongoing deficits.
asserted
we → agitate → deficits
Their universal fix is to raise the Goods and Services Tax, which, if you hadn't already guessed, hits low- and middle-income earners the hardest.
asserted
you → raise → earners
Remember the three-stage income tax cuts, the ones that really benefited higher-income earners?
asserted
that → remember → earners
Apparently, they were going to be self-funding.
asserted
they → go → ?
They were going to generate so much economic activity that the cuts would increase government revenue.
asserted
cuts → go → revenue
Instead, they've created a structural imbalance in our federal finances.
asserted
they → create → finances
And whenever the idea of spending cuts is raised, there is an almighty burst of outrage.
asserted
idea → raise → outrage
His 2014 federal budget was howled down.
asserted
budget → howl → ?
This year's budget, meanwhile, targeted welfare payments to the wealthy which, given our circumstances, should have been a no-brainer.
asserted
which → target → circumstances
The hugely generous discounts to capital gains tax and the loophole created by negative gearing were wound back, along with a tightening of the generous tax arrangements surrounding family trusts.
Five months later, and the outcry against the changes continues.
asserted
outcry → create → changes
…and 27 more, not listed.
The Aporia
