A natural way that an economist approaches a problem is to say, here's where I think the economy is going; this is what we need to deal with the problem.

Fewer people working means permanently lower tax revenues.

Cold-turkey deficit reduction would cause a significant recession. A recent analysis by the Congressional Budget Office estimated that going headlong over the cliff would cause our gross domestic product, which has been growing at an annual rate of around 2 percent, to fall at a rate of 2.9 percent in the first half of 2013.

Raising the minimum wage, as President Obama proposed in his State of the Union address, tends to be more popular with the general public than with economists.

Tax increases appear to have a very large sustained and highly significant negative impact on output.

You know, I think the, the crucial thing, you know, we have put in place what is, is just simply the biggest, boldest recovery package in history, right; the stimulus package, biggest ever; the financial rescue, absolutely comprehensive; a housing plan - that is incredible medicine for the economy. And we fully expect it to work.

In the four decades after World War II, manufacturing jobs paid more than other jobs for given skills. But that is much less true today. Increased international competition has forced American manufacturers to reduce costs. As a result, the pay premium for low-skilled workers in manufacturing is smaller than it once was.