State of the Union: 5 Things You Need to Know

Perhaps you were busy last night or maybe instead of watching the real president, you jumped over to HBO to watch Michael Douglas in "The American President". Either way, here's what you need to know about President Obama's State of the Union.

The speech was 6,849 words and as expected, the economy was front and center. Here are the highlights, followed by bottom line analysis of each point.

• Five-year freeze on non-security, discretionary spending: While the amount is relatively small (approximately 15 percent of the $3.5 trillion spent by the federal government last year), the acknowledgment of the growing US debt issue is seen as important step by investors and economists alike. However, as MoneyWatch blogger Mark Thoma notes, if the government clamps down too hard and introduces austerity measures like those seen in Europe too quickly, the economy could be thrown into another recession.

• Restructuring of the corporate tax structure: Close existing loopholes and cut the corporate tax rate. Bonus: a a pledge to address problems in the health care law that is burdensome to business. Here's your "new" Obama -- friend of the business community. Kidding aside, most agree that these are areas where the two parties can compromise.

• A commitment to "investment" (i.e., spending) in innovation, education and infrastructure. Obama declared that we are at a "sputnik moment," which anyone under the age of 45 quickly Googled and figured out that the President was talking about the US-Soviet race to the moon. Who doesn't want 100,000 new math, science and engineering teachers; high-speed rail and a national wireless initiative? Of course we want to compete globally, but how are we going to pay for this, Mr. President?

• Tax increases for the wealthy: "We simply cannot afford a permanent extension of the tax cuts for the wealthiest 2% of Americans." Here's what the President didn't say: it's not just going to be the wealthy--taxes are going to rise for almost everyone. Hard to get re-elected on that platform, though.

• Social Security: "We should also find a bipartisan solution to strengthen Social Security for future generations. And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations." In the "I hate to state the obvious department," this is simply impossible. We all know that the way out of the nation's debt problems comes down to old-school financial planning: you can increase what you take in (taxes) or decrease what goes out (the majority of which are entitlements).