"Well, first of all, if you look at the benefits of getting a college degree right now, it's clearly beneficial. People with college degrees will make much more money - I think upwards of $1 million more in pay over their lifetimes - than will someone who stops at high school. But that said, what we have found this decade is that the gains from getting a college degree have actually fallen slightly. In fact, adjusted for inflation, those gains have fallen 11 percent from 2000 to 2008. And economists think there are two reasons. Number one, we've had two recessions this decade, one at the front end, one at the back end. And those recessions have really hit industries with many college grads - technology in 2001 and finance now. So that's hurt the pay that those college grads are getting. And secondly, the supply of college grads has been increasing rapidly. Whenever you have a market where supply increases relative to demand, you're going to put downward pressure, in this case on salaries. So the bottom line is certainly the gains - the financial gains - of going to college are big but perhaps not quite as big as they were eight years ago."

"Well, it's interesting. Some economists say, actually, it's not accurate, and they give two reasons. One is health care expenditures, which actually takes up 20 percent of consumer spending . . . well, if you look at who actually makes health care expenditures, it's not you and me, it's not the consumer; 85 percent of that comes from a third party, either insurance companies or government. So consumers here aren't the driving force. The other factor is consumer spending on imports, on imported products. That takes up 18 percent of consumer spending. So when this spending slows, it's not domestic producers who are hurt, it's foreign producers. So if you take out these two factors, and you look at the out-of-pocket consumer spending that directly affects the U.S. economy, it comes to about 43 percent of all spending, not 70 percent. That's still important, still very important, but perhaps not as dominant as you might think."

"The key part of the question is over several decades, because the answer to that specific question is certainly yes. Let me give you a couple of examples. If you invested $1 in the stock market in 1980, you'd have $17 today. If you invested $1 in the stock market in 1950, you'd have $1,200 today. So over long periods of time, over several decades, yes, the stock market does tend to make money for you. But it doesn't always make money for you in the short term. For example, if you invested $1 in the stock market at the beginning of this decade, in 2000, you'd have less than a dollar today. So it really depends on when you get in the stock market and when you get out, but the evidence clearly says the longer that you stay in, the more the likelihood that you'll make money."

"Well, first of all, pay, as you might expect, has not been changing very much this year. In fact, nationally on average, it's gone up somewhere between 1 and 2 percent, which is not much when you factor in inflation. Economists are somewhat divided on what they see for pay for 2010. Typically, if we assume that 2010 is going to be a year of economic recovery, economic growth, typically if we look at past recessions and recoveries, pay does take jump after a recession as the job market solidifies and businesses are competing more for good workers. But this time around may be different because many economists continue to see unemployment being a big problem, big issue in 2010, nationally, perhaps staying above 8.5 percent, maybe even a little higher here in North Carolina. So the bottom line is that many economists think that we're going to see very little progress, if you will, on pay, very little increase in pay in 2010. Another reason being, workers, because the unemployment rate going to be so high are going to be willing to take less just to have a job."

"No, we're not, and that's the good news. In fact, if you look at total inflation, including everything that consumers buy, it was actually negative last year. It went down by 1.5 percent. That means on average, prices fell by 1.5 percent. Now, if you do take out what economists call volatile energy and food prices - we often take those out because they can move up, but they also can move down very quickly - then we do find that we did have positive inflation as prices went up. But they went up only a little over 1 percent, about 1.4 percent. So regardless of the measure you look at, most economists don't see a threat of higher inflation right now. But experience tells us that higher inflation takes time to develop. The federal government has engaged in a lot of spending, a lot of money creation. That often will take between 18 and 24 months to show up as higher inflation. So I think the worries about higher inflation are not worries about higher inflation right now. They're worries about higher inflation in 2010 and 2011."

"Detractors of the stimulus point out the fact that the unemployment rate has continued to rise. In fact, we're now at nationally 9.8 percent, even though we've had a stimulus in effect since March. That's true. Supporters of the stimulus, on the other hand, say, look, the bulk of the stimulus money has yet to be spent. That's also true. We're looking at most of the stimulus money being spent in 2010 and thereafter. But in terms of economics, the real issue about the stimulus really comes down to something economists call multipliers. That is to say, for every dollar the federal government spends, how many new dollars will that result in being spent in the economy. Supporters of the stimulus say that there's a lot of evidence to show that that multiplier is over one, maybe l.5, maybe two. So the $700 billion spent by the federal government might turn into over $1 trillion. Detractors, however, can find equally well-done studies that show that the multiplier maybe is only one or perhaps even less than 1. So this really comes down in some sense to something that is going on in the halls of academia, where economists are debating, and they're trying to find empirical work to support what really is the government multiplier. If it's greater than one, then you could say the stimulus eventually will work. If it's less than one - in fact, if it's close to zero - then you might say, no, it won't work."

"It is true. When the framers of Social Security developed the system back in the 1930s, what they, I think, rightly concluded is that if the system had any spare money - reserves, if you will, for the future - that money ought to be invested, not just lie around, because if you invest it, you earn some interest. Then the question became, well, what do we invest it in? And the framers wanted Social Security investments to be absolutely safe. So if you look around the investment world, actually - and many people will find this hard to believe - actually, the safest investments around are with the federal government, so-called treasury securities. So that's what Social Security is required to do by law. If they have excess funds, they have to invest them in treasury securities. That money does go to the federal government. The federal government can spend that money. That means the cash in the reserve fund of Social Security is replaced by these treasury security IOUs. But the good news is the federal government has a perfect track record, perfect, going back over 200 years of always paying its debts, paying interest on those treasury securities as well as paying the principal when it's due. So I don't think that's an issue. Now we did have a debate a couple of years ago in the country about whether we should change the investment mix of Social Security. The conclusion then was still, we ought to keep it the way it is, and, indeed, I think that will remain as is for the foreseeable future."

"It's not in trouble immediately. The fact that it had to dip into its reserve fund I think is totally due to the recession. With the recession, we have fewer people working, so contributions are down. I think those contributions will pick up when the recession's over, so I think this is probably at most a two-year problem. But, that said, Social Security certainly has a longer run problem. In fact, every year the trustees of the Social Security system report on its financial health. Right now, they are telling us that the deficits that we just saw this year and probably next year will actually become permanent beginning in 2016. That is, to make payments, Social Security will have to dip into its over $2 trillion fund. And that $2 trillion reserve fund will be depleted by 2037. So in essence, Social Security will go bust by 2037. After that, the contributions into the system, the trustees estimate, will only be able to cover three-fourths of promised benefits. So, yes, we had a little run on Social Security now, but I don't think it's a major problem. But we do have a problem looming, so better now than ever to look at Social Security to see what can be done to shore up the system."

"Forbes considered a variety of factors, including business costs, regulatory environment, growth prospects and quality of life, and the good news is that North Carolina ranked fifth in the entire country, behind Virginia, Washington State, Utah and Colorado. We ranked very favorably on business costs. We also ranked very favorably on regulatory environment. The good news, however, continues because when Forbes went and looked at cities, North Carolina had six cities in the top 25; in fact, more than any other state, including Raleigh, Durham, Charlotte, Wilmington, Asheville and Winston-Salem. I think these rankings are important more than just simply to say, hey, we ranked high, because if we're looking at a very slow economy in the coming years - which most economists think is going to happen - I think businesses that are looking to expand are obviously going to look most closely at those areas that they find attractive. And here, North Carolina looks very, very good indeed."

"A mortgage reset occurs when you have bought a house using what's called an adjustable rate mortgage - that's where the interest rate can change - and there's some time fuse on that as to when it will change . . . one year, two years, three years; they come in different varieties. And so we say that mortgage rate resets when that fuse is up, and that adjustable rate can go either up or down. And this was a big, big problem over the last five years as people took out more and more adjustable rate mortgages during the housing boom. And then when interest rates went up, their payments went up. They couldn't afford the mortgage, and they were foreclosed upon. So, big problem. The issue now is that we've got a bunch of these coming due over the next couple of years. We're not out of the woods on these mortgage resets, and so the concern that economists have is, well, will interest rates be higher in the future, in which case, we'll have these folks with adjustable rate mortgages have their interest rate go up - their payments go up - will that set off a whole new wave of foreclosures? Or will the Federal Reserve keep interest rates lower - indeed, mortgage rates have actually been coming down recently - in which case, actually that would help people. The rate may be reset to something lower. So this is something to certainly keep an eye upon. It's inter-related with unemployment because the more that people are unemployed, the more this could be a problem. So the housing market is certainly not out of the woods yet."

"Economists like me eagerly anticipate this. It's sort of like a Christmas present in the summer because there's so much good data. This report that just came out is for 2008. Now, this is important because this is the first year of the recession. And as expected, we found that earnings went down for workers. In fact, they went down 1 percent for men. They went down 2 percent for women. Also, annual earnings fell for households in all income categories, but actually more so for middle income households than for either lower income or upper income households. A measure of income inequality did rise slightly in 2008 compared to 2007, but it was actually lower than what it had been in 2005 and 2006. And also the poverty rate nationwide did go up. Again, this is not unexpected, due to the recession. Nationwide, the poverty rate in 2007 was 12.5 percent. It rose to 13.2 percent in 2008. These are all numbers we would expect to see during a recession. We hope they will get better in the next few years."

"Well, I wouldn't go that far, but I think what's happened in the last two years I really think has exposed the differences between renting and owning. If you rent a place, it's what economists call pure consumption. You're renting that space. You don't have any investment stake in that space. Yes, you're paying money, but you're using the space. So I wouldn't say that it's money down the drain. If you're buying a home, you're doing two things. You're consuming, you're using that space, but it's also an investment. You worry about whether the value is going to go up. And of course, five, six, seven years ago, everyone thought housing prices would just continue to go up forever. And so they looked on owning as a great thing, because you got the space to live in plus it was a fantastic investment. Obviously, in the last two years, it's been a different story. On average, housing prices have gone down. I think for the average person, what most economists would argue, if you're going to be in a spot a short period of time - say, less than five years - it probably means you should rent. But if you're going to be in a spot for a long period of time, probably owning makes more sense, just because it gives you more control. But don't think that owning is necessarily going to be the most stable investment. We will probably see housing prices go up maybe 2 percent a year from here on out, not the 12 percent a year that they were going up a couple of years ago."

"If you watch financial news programs, it is amazing. One analyst will be worrying about inflation. The other analyst will be worrying about deflation. Simply put, inflation means average prices are going up. Deflation means average prices are going down. Now, both can be a problem, actually. High inflation obviously can hurt people whose wages don't keep up, think of the late 1970s, early 1980s. Also, high inflation tends to push interest rates up. For example, in the early 1980s, we had mortgage rates of about 17 percent. So it means people have a hard time borrowing money to buy things like a house or a car. On the other hand, deflation can be bad because ultimately - and we've had experience with this during the 1930s - ultimately it means wages are going to be pushed down. And also, if you have debt that's denominated in a certain dollar amount, it actually makes that debt relatively more expensive. I think the bottom line here is that economists have decided that probably what's best for most people and most parts of the economy is to have moderate levels of inflation, somewhere between 1 and 3 percent a year."

"Well, this is a source of a lot of controversy and discussion right now, and the numbers indicate that the national debt will be $14 trillion in 2019. That's the latest estimate from the Congressional Budget Office. Now, of course, these big numbers are always unfathomable to people, so what you need to look at here is the debt as a percent of the economy. That's the way economists look at this, and what will happen if these numbers are true is that the debt as a percent of the economy will grow from 63 percent of the economy to 68 percent of the economy in 2019. Now, a couple of points here. No one's ever going to be presented with the bill. It's popular to take the national debt and divide it by the number of people, and say this is what each of us owes. We're never going to get a bill. The debt can be continually refinanced, if you will, over time. The real way, in my opinion and economists' opinion, to look at the cost, for example, of additional national debt is to say, how much more is this going to cost to service that debt, the interest on that debt. And the additional interest that we will have to pay in the next 10 years on that new national debt is about $3 trillion. And the question is, is it better to spend $3 trillion that way, servicing the national debt and then all that the national debt buys, or is it better to spend $3 trillion in another way, for example, in the private sector. I think that's the essential question that our public decision makers have to answer."

"Well, it simply means that technically the recession's over before we start to get jobs back. This is not unusual. If you look at the last recession in 2001, it technically ended in November of 2001. We didn't see jobs start to come back until 2003, over a year later. And there are a couple of reasons for this. I think one is that when the economy starts to pick up, employers or businesses try to recover some profitability, so they try extra hard to keep their costs down. That usually means they're very stingy on labor. Secondly, I think employers want to be absolutely positively sure the economy is back before they go out and hire people. So we do tend to see a lag in the employment market from when the overall economy begins to recover. That can't go on forever, though. At some point, we have to have the labor market perk up. Again, economists think this will probably occur sometime in early 2010."