Concepts like the standard of living can be subjective. For example, the average poor person in America often has luxuries that were beyond the reach of the middle class a decade ago. Access to air conditioned homes and flat screen televisions with hundreds of channels are viewed as evidence that the standard of living is rising.
A more objective approach would be to use real GDP per capita which is the amount of goods and services created by each person in the economy. While GDP is commonly thought of as a measure of output, it also a measure of consumption since output is roughly equal to consumption in an economy.
Traditionally, GDP is broken down into categories that include consumption, investment, the difference between imports and exports and government spending. Investment is actually a way to defer consumption, and investments should eventually lead to increases in consumptions. When imports exceed exports, consumption is actually higher than output.
Government spending is a distribution of benefits to each individual and although the government redistributes benefits unevenly, as a whole, the benefits are a measure of the national consumption of government services.
Real per capita GDP in 2011, the latest available data, was lower than it was in 2005, six years earlier. That is the longest period of decline since the data was first released in 1960.
In the 1980 election, Ronald Reagan famously asked, "Are you better off than you were four years ago?" That question is often repeated in election years. It should actually be considered every year. And for an unprecedented three years in a row, the answer has been "no."
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