Due to the success of Cash for Clunkers, your government has instituted a new program to stimulate new home sales:

(f) Qualifying transactions ($350,000 Credit).

(1) The new domicile is a rowhouse or triple-decker with a commute distance of no more than 5 miles. The eligible trade-in domicile has a commute distance of 18 miles or more and is a garden townhome, detached, 3,500 SF single-family dwelling, or restored farmette, and the commute distance of the new domicile is at least 9 miles, but less than 20 miles closer to the owner's source of employment than the eligible trade-in domicile.

(g) Qualifying transactions ($650,000 Credit).

(1) The new domicile is an urban condominium with a commute distance of no more than 2 miles, adjacent to walkable streets, shops, public transit. The eligible trade-in domicile has a commute distance of 28 miles or more and is a gated-community townhome, detached, 4,700 SF single-family house, or second-income horse farm in the rolling hills, and the commute distance of the new domicile is at least 20 miles closer to the owner's source of employment than the eligible trade-in domicile.

In this depression CEOs and financial workers were the first to be accused of milking the system, but they won't be the last. Some government and union workers are entitled to retire at full salary, or more, at a fairly young age. Over the last thirty years I have read stories and heard rumors about police, firefighters, sanitation workers, etc., gaming their retirement systems. Strategies usually involve putting in a large number of hours in their final years to retire at an inflated salary, or claiming disability to retire at higher salary.

Having relatives in railroad shops, I realize that twenty years of working in the shops usually leads to some sort of chronic physical complaint, and I don't begrudge retirement to anyone that just can't do it anymore. But as several news outlets report, some pensions are being questioned as, "overly generous" in this shrinking economy.

LA Times:

On Tuesday, the country's two biggest public pension funds reported losing almost $100 billion in the fiscal year that ended June 30. And the governor is expected to highlight the new numbers as he renews a campaign to trim the cost of providing lifetime, fixed benefits to hundreds of thousands of government retirees.

...

Schwarzenegger told reporters last week that the big pension funds could face an estimated $300-billion shortfall in covering the cost of pensions to current and future retirees.

The financial hemorrhaging underscores the risk to taxpayers of ensuring generous fixed benefits to retired government workers, said Marcia Fritz, vice president of the California Foundation for Fiscal Responsibility, which seeks to revamp the pension system.

"It's crazy to put so much of our resources into such a generous retirement," said Fritz, a certified public accountant in the Sacramento suburbs.

The State Journal (West VA):

CHARLESTON -- City officials from around the state say their communities can no longer afford to cover the benefits of retired police officers and firefighters, so they are asking the state Legislature for help.

... The city's last six police and fire department retirees will likely draw $1.5 million each in pension benefits over the course of their retirements, even though each person made less than $900,000 during his or her career...

For example, police and firefighters can retire with full benefits at age 50, the reasoning being both lines of work often involve physical activities that become more stressful the older people get. But people now live much longer than they used to, so it is not uncommon for retirees to live more than three decades past their retirements, Bell said.

Read more »

Unemployment usually carries you for about 26 weeks, but sometimes there are state and federal programs, extended benefits, that add additional weeks. In New York, basic unemployment + extended benefits may carry you for 79 weeks, about a year and a half.

Emergency Unemployment Compensation, shown in red above, now provides 33 additional weeks of benefits.

After most recessions, workers find jobs before needing extended benefits, but in this great recession, 2,656,879 people are on extended federal benefits, and many are close to exhausting even their extended benefits.

Mish Shedlock at Global Economic Analysis has more analysis (and wants to sell you gold):

Initial Claims Analysis

One could point at the substantial +25,000 jump in initial claims and conclude things are deteriorating. However, it is difficult if not impossible to know exactly because a huge seasonal adjustment factor beyond the ordinary related to auto manufacturing plant shutdowns skewed the seasonally adjusted numbers.

The unadjusted drop of -78,111 is even more misleading. Moreover, the only way to use unadjusted numbers accurately is on a year-over-year basis and that fails for reasons stated.

Continuing Claims Analysis

Note the huge drop of 131,750 in continuing claims. Ordinarily this might be significant. However, these are not ordinary times. Much, perhaps all of that drop is due to benefits expiring.

Indeed states and federal programs have extended unemployment benefits several times. They do so but do not adjust the headline numbers.

Please look at lines boxed in red for Extended Benefits and EUC 2008. The latter is Federal extensions picking up where states left off. The former is state extended benefit programs.

Note that 2,656,879 people are on extended federal benefits compared to 127,438 a year ago!

In other words, the headline extended claims number of 6,416,250 is off by more than 2.6 million. And one also needs to add in another 352,000 from various state programs.

Update: Contrast Shedlock's analysis with the Wall Street Journal's take:

Jobless Claims Fell in Latest Week

The number of U.S. workers filing new claims for state jobless benefits fell last week, providing another glimmer of hope that the economy may be on the road to recovery.

We are the Folk Song Army
Everyone of us cares
We all hate poverty, war and injustice
Unlike the rest of you squares

There are innocuous folk songs
Yeah, but we regard 'em with scorn
The folks who sing 'em have no social conscience
Why they don't even care if Jimmy crack corn

If you feel dissatisfaction
Strum your frustrations away
Some people may prefer action
But give me a folk song any old day

The tune doesn't have to be clever
And it don't matter if you put a couple extra syllables into a line
It sounds more ethnic if it ain't good English
And it don't even gotta rhyme - excuse me - rhyne

Remember the war against Franco
That's the kind where each of us belongs
Though he may have won all the battles
We had all the good songs

So join in the Folk Song Army
Guitars are the weapons we bring
To the fight against poverty, war, and injustice
Ready, aim, sing

- Tom Lehrer

I often think of that part about how they won the battles but we had the songs. I think of it now as I read about teabaggers disrupting town halls. Four years ago, anyone that even looked like they could spell, "Democratic" was being escorted out of political town halls. Now our ruling party can't even throw out obvious miscreants.

We are the health care army
We're coming to your town
To ask your support for single-payer
But the teabaggers shout us down

We are the health care army
we're all really nice folks
How it does upset us
That Republicans treat us like jokes

A little history from James Hamilton at Econbrowser:

One of the more embarrassing features of the New Deal was the Agricultural Adjustment Act of 1933, which paid farmers to slaughter livestock and plow up good crops, as if destroying useful goods could somehow make the nation wealthier. And yet here we are again, with the cash for clunkers program insisting that working vehicles must be junked to qualify for the subsidy.

Bradford Plumer, at The New Republic, sees meager environmental benefits:

Now, as we've noted before, the actual environmental benefits of this program may well prove modest. The fuel-economy requirements for the new car were, after all, fairly lax: You could in theory trade in a Hummer that got 14 mpg and get $3,500 toward a brand new 18 mpg SUV. That's still an upgrade (and, in fact, that trade would actually save more gas than upgrading a 30 mpg sedan to a 35 mpg vehicle), but it's a meager one. And if the upgrades are, in fact, all meager, they could end up being dwarfed by the energy required to manufacture new vehicles (particularly since dealers have to scrap the "clunkers" that get traded in--many of which are perfectly good, albeit inefficient, cars). It'd be interesting to see data on what people actually purchased.

On the other hand, the program certainly offers a jolt to the economy, and can provide a huge boon to the ailing auto industry--$1 billion to spur the purchase of 300,000 new vehicles in five days has to rank as one of the more fast-acting stimulus programs to date. (I imagine the program is mostly just moving up purchases that would've happened anyway, but in a recession, that's not a bad thing.) Still, if the program's so popular, and if everyone's lining up to trade in their old clunkers, then if Congress does decide to re-up, it ought to ratchet up the fuel-economy requirements for new cars, so that we can at least get some energy benefits out of this thing.

Daniel Stern, at The Truth About Cars , is outraged at the waste:

Whatever its putative and real goals, and whether or not it achieves them, C4C is the biggest, gaudiest emblem we've yet devised for the extent to which our society prizes disposability and thrives on waste. By comparison, planned obsolescence was a lackadaisical, half-assed effort even at the crass heights of its one-year-only tailfin designs.

Evidently we're no longer satisfied merely to be wealthy and shortsighted enough to make, buy, and fuel unnecessarily big vehicles with unjustifiably thirsty engines; now we're apparently so wealthy and shortsighted, we can afford to go on a (three-?) billion-dollar orgy of destroying and discarding functional machines before they've given all reasonably possible service. That's just plain foolish--ask anyone who lived through the Great Depression.

Reduce-reuse-recycle, right? Wrong. Let's run down that three-item hierarchy of how to be kind to the earth: What's getting reduced, fuel consumption and pollution by the new car relative to the clunker? Not given the staggering amount of pollution produced and resources consumed to manufacture even the smallest, most fuel-efficient vehicle. Exactly how staggering is tough to nail down definitively; what constitutes "making" a car? Where in the process do we start? Do we count only the material and energy used within the factory grounds? Or do we go a step upstream and count the material and energy used to make those materials used at the factory, and the energy spent to transport them thereto?