A successful argument for a government manufacturing policy has to go beyond the feeling that it's better to produce 'real things' than services. American consumers value health care and haircuts as much as washing machines and hair dryers.

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.

You care about the deficit because it allows you to do things you need to do to help people who are suffering.

Making labor less expensive helps firms hire people.

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.

As a former member of President Obama's economic team, I have a soft spot for the fiscal stimulus legislation he signed just a month after his inauguration.

There's a joke in economics about the drunk who loses his keys in the street but only looks for them under the lightposts. When asked why, he says, 'because that's where the light is.' That's the problem with the deficit.