Everyone just keeps acting like its normal

That's a common trope in dystopian settings.

The youngest people in the society don't understand that anything is even wrong. The rich folks have a vested interest in people being more afraid of foreigners and domestic terrorists than any government malfeasance. And the working class is so occupied with simple survival that they see no real opportunity to revolt... until something really falls off the rails, at which point the military moves in to suppress dissent with maximum bloodshed.