Functional Umeployment in Alstrynomics
Remember, Alstrynomics is the pratical application of Economics and Political Science with a fact based approach.
When trying to determine if someone is functionally unemployed, the definition is simple.......the total income is not sufficient to meet basic expenses including home payment or rent, food, medical, education, and fuel costs. Discretionary spending is not even factored into the equation.
For example, if a family of four with a mortage of approximately $2000 per month, food costs of $1000, health care of $800 per month, fuel and utilities $500 would need to take home approximately $4000 per month to meet monthly needs.
If that family earned less than $4000 it would be functionally unemployed...even if they never made a trip to BestBuy, took a vacation, or purchased clothes.
Now we could tweak the above a bit one way or the other, for example health insurance for many families is much higher than $800 per month.....even with employer contribution....and for others home expenses, including property taxes, insurance and maintanence may be higher or lower than $2000 per month.....for this family....it is substantially higher.....but I am trying to find some middle ground when providing numbers.
If the above family makes less than $50K per year, then Alstrynomics defines that family as functionally unemployed. So when I make my 50% unemployment prediction...it is that I am predicting that 50% of all Americans will be below the functional employment line before we bottom out in this borrower crisis. For a family of four, it would include four people.
In other words, in order to be functionally employed, any family below the line needs to BORROW money to make ends meet.
I hope this clarifies things for those that didn't understand the projections provided by Alstrynomics.
Maybe this provides some perspective why Alstrynomics dictates reorganiztion before any recovery can be achieved.....in the mean time, grab your surfboard and ride this tsunami.