The Impossible Promises of our Politicians

Eighty per cent of Australian households now receive more in government benefits than they pay in income tax.

Now that the majority of voters are the beneficiaries of state largesse, has it become politically impossible to unwind middle-class welfare?

The 2015 Intergenerational Report, produced by the Australian Treasury, has highlighted problems that astute writers such as Tom Woods[i] have known for a long time. The social democratic welfare state is financially unsustainable.

All over the world, the impossible promises governments have made to their populations are beginning to unravel. Millions of people have arranged their lives in the expectation of various forms of government support that will be mathematically impossible to provide.

The Intergenerational Report states that:

The Australian Government is currently spending over $100 million a day more than it collects, and is borrowing to meet the shortfall. … The policies currently legislated would not see the budget in surplus at any point over the next 40 years.

Fixing this is not easy.  All attempts to reduce government spending are met with vigorous political campaigns from those personally affected.  Has it become a politically impossible task?

[i] Tom Woods is a senior fellow at the Mises Institute in Auburn, Alabama and the author of nine books including The Politically Incorrect Guide to American History, The Church and the Market: A Catholic Defense of the Free Economy and Meltdown – his analysis of the 2008 crash. The quotation is from his introduction to Back on the Road to Serfdom, which he edited.

For more, read my book The Fragility of Freedom: Why Subsidiarity Matters