The minimum wage will increase in eight states and several localities across the country. In these states, the minimum wage is indexed to inflation, a campaign priority of Barack Obama back in 2008 that never got past the formative stage. This can actually have a pretty decent impact, if a small one in macroeconomic terms, and a significant increase in the minimum wage would be even better.

The biggest reason I can find for economic optimism in 2012 is a belief that people will eventually have to buy new cars and form households, so why not this year? That appears to be the animating thought behind Matt Yglesias’ cheery forecast in the new year. But the economic story is a lot more mixed.

The balance sheet recession – collapsing wealth, underwater homes, student loans – is creating a major part of the crappy economy. Everyone’s waiting for things to get better, and by extension ensuring that nothing will. In this instance, only repairing balance sheets – such as through debt forgiveness – can get the economy on a better path. And then the kids move out of their parent’s house and housing construction starts jumping and we get some relief.

Though the recent deals on freezing discretionary non-security spending and 2011 appropriations and the debt limit didn’t reduce spending by a tremendous amount in the short-term, the accumulation of all of these deals, along with the fading out of stimulus measures from 2009 and 2010, has made fiscal policy contractionary, despite 9% unemployment.

If economics were a science, professors would sic their grad students on a paper by Casey Mulligan explaining that the minimum wage hike in 2009 cost 800,000 jobs.

The GDP release for the first quarter of the year, which ends on Thursday, will come out in a matter of weeks. And the same analysts who upgraded on the tax cut deal are now downgrading on this news. And that’s before the likely government shutdown on April 8, which will affect the second quarter.

When I was leaving Las Vegas (don’t break into song), I encountered a guy on the elevator who was talking to his friend about his loss of home equity. “It’s like playing at the casino,” the man said. “You have a bunch of chips, and after a few hands, you look down, and they’re gone.”

This was a common theme at the Netroots Nation conference. Not specifically a guy relating home equity to a loss of blackjack chips, but attendees casually mentioning their interactions with people in Nevada who are struggling.