"We've got a big hole that we're digging ourselves out of," President Obama said, starting off another one of his back yard chats on the economy, this one in north Seattle at the home of Erik Foss, a general contractor, and his wife Cynnie Foss, the volunteer services manager at the University of Washington Medical Center.

The visuals were decidedly recession-era: modest two-story home, coffee mug set on a stool for the president to sip from, the audience seated on chairs that were of such hodgepodge designs they might have been brought over by neighbors (wooden chairs, plastic chairs, metal chairs, folding chairs, blue canvas camp chairs).

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He introduced Mike McGinn as "the outstanding mayor of Seattle" (somewhere Joni Balter is rolling her eyes) and praised Senator Patty Murray and Congressman Jim McDermott, both on hand as well, for helping push through health care reform and the recovery act. "The economy's now growing again," Obama said, contrasting the current situation at length with the mammoth job losses and shrinking economy that greeted him when he entered office.

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Jody Hall, owner of Cupcake Royale, talked about how a small business loan from the federal government helped her open her new store on Capitol Hill and expand her business even during a recession. But first, she talked about the cupcakes she brought for Obama, and what a hard time she had getting them past his security. "I suspect the Secret Service confiscated them," Obama said, smiling broadly, "and are eating them as we speak."

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When it came time for questions from the neighbors in the chairs—as opposed to people like Hall, who'd been brought along to highlight a new administration report on how women are faring during the recession—there was a long silence at first. "Don't be shy," Obama said. "Even though every word you say will be recorded by those people back there."

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There were no questions about "Don't Ask, Don't Tell"—though Hall did make a point of mentioning her child and her partner when she talked to the president about her business and her family.

Instead, people mostly gave Obama easy opportunities to talk about his accomplishments and challenges during his first two years in office.

"Health care is just really complicated," Obama said, in response to a question about why the media hadn't done a better job of pushing back against politically-motivated falsehoods regarding what his reform does—and doesn't—do. "So we knew going into the debate that there would be distortions."

On why more people don't understand all that's been done in the first two years of his administration: "We had to move so fast, we were in such emergency mode, that it was hard for us to do victory laps... We had to move on to the next thing."

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Obama also addressed the national debt—a big issue in the fall campaigns, particularly here in the U.S. Senate race between Murray and Republican challenger Dino Rossi.

"People have a legitimate concern, I think, about the debt and the deficit," Obama said. Expensive measures had to be taken in the last two years to stave off an economic depression and stabilize the economy, he said, and those measures added to the deficit (which, when he took office, was already at $1.3 trillion after eight years of the Bush administration). But, Obama added, the question now is: "How do we get back to a point where we're living within our means?"

Republicans aren't answering that question, Obama said, an implicit jab at candidates like Rossi, who talk about the deficit constantly but also, for example, want to extend the Bush tax cuts for the wealthiest Americans, which would add hugely to the deficit.

The president said voters need to ask Republicans what their plans are for reducing the deficit, and listen very closely. "If they can't answer the question," he said, "then they're not serious about it."

He talked about his general philosophy on the role of government ("I don't want government to get bigger, I want government smarter"); his dismay at the state of American infrastructure, like our jammed up airports or the broken South Park Bridge ("We used to have the best infrastructure in the world, and frankly we can't make that claim anymore. I want us to get back to number one"); and the general mood of the country ("We've gone through a very difficult time in the last couple years").

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Toward the end, one of the people in the chairs stood up and told Obama: "You may not hear this very often, but we're very proud that you're our president." Obama replied: "Thank you."