Income inequality does not equal economic inequality

Once again my contender has failed to bring forth an argument which refutes my claims. What he has done with his rebuttal, is given you a list of facts and only facts – none of which provide any support for his argument claiming that increases in income inequality reflect increasing levels of economic inequality - as measured by standards of living. Fact # 1 - Yes we have inflation, and yes rich people have more money to spend than poor people. I totally agree. My opponent implies that because of inflation, poor people who have less money to spend will feel these effects more so than the rich, and therefore experience a greater decline in their standards of living. This sounds plausible and very well may be true. My only problem with this statement is that we've always had inflation in this country ever since we started using money. In fact rates of inflation have been much higher in years past. Just look at the 70's and 80's. The average inflation rate between 1974 and 1985 was 8%. In some years, it was much higher - such as 13.58% in 1980. What is 2009's inflation rate projected to be? As a matter of fact, it's projected to be 0%. Moreover, the average inflation rate between 1998 and 2009 has been a whopping 2.5%. Despite these varying rates of inflation, whether high or low, we still have managed to raise our standards of living, through innovation and productivity, for the poor and rich alike. Please refer back to my statistics and statements from round two. (All of these inflation statistics can easily be found on govt. websites.) Fact # 2 - The unemployment is the highest it's been in some time: "In October, the unemployment rate rose to 10.2 percent, the highest since April 1983, and nonfarm payroll employment continued to decline (-190,000). Here, once again, my opponent is stating a fact. But what does this fact do to help his argument, or more importantly, discredit mine? We are in tough economic times right now and there is no doubt about that. Rich people, poor people, and in the middle people are all feeling the crunch. So what does this mean? Many of us are adjusting our spending habits and for a lot of us that means less eating out, buying generic consumer goods, or for some of us, having to go with the Toyota over the Mercedes. Are these spending adjustments creating a decrease in our standards of living? Maybe, but those generic goods provide the same functions as name brand products with a little less flare. That Toyota will still get you from point A to point B with a little less style. My point is – we may have to temporarily downgrade in some areas of our lives; but, is this temporary downgrade substantially dragging down our standards of living? Furthermore, have you been to the mall lately, or your local car dealer, and how about Wal-Mart? Sales are going on like never before and businesses are slashing their prices. Buy one get one free deals are a dime a dozen - I've even seen those offers at car dealers! Now for those who are truly unemployed, some companies provide severance packages and our federal government provides, and has extended unemployment benefits to help assist the jobless. In addition, many of the more needy families may qualify for further assistance through various other governmental social welfare programs. All of these social safety nets are in place to help sustain you and your family until you can find another job. For the truly unfortunate who are unable to find a job and eventually end up on the streets - well there is even some relatively good news for you to. Standards of living for the homeless are also on the rise, and this brings me to my next point. Fact # 3 - On any given night in America, anywhere from 700,000 to 2 million people are homeless, according to estimates of the National Law Center on Homelessness and Poverty. First I will ask this question – Do homeless people receive better care and have more opportunities to rise above levels of homelessness today, than they did 50 years ago? My research says yes! Homelessness is a sad fact, but did you know that – • One of the most dramatic findings to emerge from the 1996 National Survey of Homeless Assistance Providers and Clients (NSHAPC) is the tremendous growth in the number and variety of homeless assistance programs during the late 1980s and early 1990s. • A report created by the Congressional Research Service states that – Before the early 1980's, most homeless assistance took place at the local level, and was often considered to be ineffective. However, as advocates for the homeless achieved national attention for the problem of modern homelessness, the federal government played a greater role in responding to homelessness and created much more effective assistance programs. • A 154 page inventory report produced by the U.S. Interagency Council on Homelessness covers in detail, over 73 federal programs targeting homelessness that are currently in operation today, many of which were not around as recently as 30 yrs ago. As you can see, even the homeless are experiencing a rise in their standards of living and most of it is due to the comprehensive assistance programs the federal government has put into place to directly help this population of disadvantaged citizens. Let me be clear, I'm not claiming that this situation is all roses and peaches. What I am claiming, is that even the individuals who find themselves at the very lowest rung on the social ladder have been experiencing a rise in their standards of living as compared to fifty years ago. In closing please allow me to leave you with two more facts to think about, which I believe, does my argument – that income inequality does not equal economic inequality – due justice. Income inequality within countries is most often measured by a scale known as the Gini Coefficient. According to the Cato Institute of Economic Research – "As measured by the standard metric, the Gini Coefficient, U.S. income inequality is about the same as in Ghana. If you believe that income inequality is a rough measure of the justice of a nation's social and economic institutions, then it would appear that the United States and Ghana are roughly on par. Yet the UN Human Development Index – a relatively comprehensive measure of average well-being – ranks Ghana 136th out of 177 nations, while the United States is ranked 12th…..This suggests that a nation's level of income inequality tells us very little….. Noting that a country's level of income inequality is high or low logically implies nothing at all." Also from the Cato institute of Economic Research – "When people talk about inequality, they tend to focus exclusively on the income part of the equation. According to all our measures, the gap in income between the rich and the poor has been growing. What Broda and Romalis quite convincingly demonstrate, however, is that the prices of goods that poor people tend to consume have fallen sharply relative to the prices of goods that rich people tend to consume. Consequently, when you measure the true buying power of the rich and the poor, inequality grew only one-third as fast as economists previously thought it did – or maybe it didn't grow at all."