I don't understand why the size of inequality matters. If I make $20,000 and Rich guy makes $2,000,000, how does me making $20,000 and him making $200,000,000 million make any difference?

Here is a Ted talk that prevents data about inequality: http://www.ted.com/talks/richard_wilkinson.html

There's another take on it here: http://www.quora.com/Economic-Inequality/How-is-income-inequ.... In, that link says that the degree of inequality matters in the us because in the us, the poor are desperately poor, and the rich are fantastically rich. In other words, if the poor had a pretty good standard of living and the rich were absurdly healthy, maybe that would be ok, but that's not the situation we have.

Because the money he spends raises the price of goods etc. Therefore your 20,000 becomes less money. This is easy too see in expensive cities. The same middle-class person would have to demand more money to live at the same standards as he/she would have elsewhere, simply because richness have driven up the prices.

So inflation is the primary concern?

How?

It makes no difference to you. It makes a great difference to the politician trying to get control of $198,000,000.

The blather about a strong middle class is misdirection. If the U.S. governing.g elite cared about the middle class, they would abolish the armies of bunny rabbit inspectors, No Child Left Behind functionaries, and so forth. The American middle class is being choked to death by regulators, not billionaires.

Because economic power and political power are strongly correlated, and always have been. It's the difference between the typical rich person having 100x more political power and influence in government than the average citizen, and the same wealthy individual having 10,000x more.

Massive gaping holes in income distribution are inherently anti-democratic. That might offend a person's capitalist sensibilities but it doesn't make it any less true.