The contention over the United States fiscal policy has boiled down to a matter of rearranging the deck chairs on the Titanic, economics professor Eric Sims said. Members of the U.S. Congress reached a compromise on December’s fiscal cliff crisis, a decision that was catalyzed by the expiration of the Bush administration’s tax cuts that had been extended in 2010 to alleviate the recession. The deal, made on Jan. 2, did not increase taxes for the majority of the population, but it also did not address the issue of national spending cuts. If Congress had failed to act, taxes increases would have happened immediately along with government spending cuts known as sequestration effected across the board. The frustrating inaction and seemingly endless debate among members of Congress was the result of a tension between the short run and long run needs of the national economy, according to Sims. “To understand where this is coming from, the debt ceiling in the United States is congressionally mandated,” Sims said. “We have [more than] 11 trillion [dollars] in total debt outstanding now, and mandates say the debt can’t exceed X [amount of] dollars, though historically we’ve always increased that. “It’s natural that we would run large annual deficits during a time of recession, because taxes are lower and spending is higher,” Sims said. “In this case, it was exacerbated by the political showdown of 2010 and the recent economic sluggishness from the Great Recession.” In a time of recession, a typical fiscal policy increases spending and decreases taxes to foster economic recovery and growth. However, with the national debt approaching 100 percent of the gross domestic product (GDP), economists are worried about the long-term consequences of the gradual increase of the debt ceiling. “Tax increases and spending cuts aren’t good for the short-term economy, but now there is concern that our debt is so big that eventually, other countries and other investors won’t want to take our debt if they doubt the full faith and credit of the U.S. government,” Sims said. “The basic gist of the deal was that taxes won’t go up for most people, just the higher-income brackets, and the spending issue was just punted farther down the line.” In the economic long run, the increased taxes and decreased spending are exactly what the nation needs in order to remedy the national debt issues, according to Sims. The fiscal cliff compromise is intended only to address the short run situation, post-recession. “‘Going off the fiscal cliff’ would have meant no deal, taxes up for a lot of people, and sequestration, which means general spending cuts effective immediately,” Sims said. “In a sense, this is exactly what we needed to do, but the tension is in the fact that the higher taxing would have been bad for the short-term behavior of an economy finally in the beginning stages of recovery.” Economics professor Robert Flood said the issue of the spending cuts, or sequestration, must be addressed soon if any lasting progress is to be made. The threatened cuts, intended to force a compromise in Congress, would have serious immediate implications. “The sequester involves across-the-board cuts of eight to 10 percent in many domestic and military programs,” Flood said. “The yelling and screaming when this comes up will be deafening.” Flood said the current deficit situation has prompted the panic of this particular negotiation. “We are now at about 39 percent of GDP spent by the Feds, which taxes about 27 percent of the GDP-taxes are low by historical standards,” Flood said. “The difference is the deficit. “To get to fiscal balance, the U.S. needs to reduce spending by 35 percent and increase taxes by 35 percent. We need some big adjustments, and the fiscal cliff stuff negotiated at the year’s end solves about five percent of the problem.” Sims said the debt ceiling is projected to be reached in six weeks, which puts pressure on Congress to come up with a new, more comprehensive deal by then to avoid a repeat of this situation. This time, they will not be able to avoid the question of spending and the national debt. “They’ll have to address the spending cuts issue in six weeks, they’ll have to negotiate the higher debt ceiling and come up with cuts that will take place over the next several years,” Sims said. “We need lower taxes and higher expenditures in the long run, but it isn’t clear how we will do that.” read more

Meghan Sullivan, philosophy professor and director of the Notre Dame Institute for Advanced Study, elaborated on succeeding at Notre Dame “without losing your soul,” in a lecture Tuesday night. Sullivan directs the God and the Good Life program. Her lecture, titled “How to succeed at Notre Dame without losing your soul,” was the sixth annual lecture for the Sorin Scholars program and was hosted by the Flatley Center for Undergraduate Scholarly Engagement (CUSE). Cate Von Dohlen Philosophy professor Meghan Sullivan advised students struggling to take care of themselves to ask the right questions, seek philosophical answers and pursue the parts of life they truly desire.Sullivan spoke about her personal life, focusing on her relationship with her brother and his time as an undergraduate student. She highlighted a particular conversation they shared while on a trip to Yosemite National Park, as she was just starting to teach courses within God and the Good Life.Sullivan offered the students in the audience a question to ponder before providing four pieces of advice.“How do you care for your soul when you’re at an elite college like Brown or Notre Dame, or when you’re just 18, 19, 20, 21 years old and trying to do really hard work in getting launched in life,” she said.Her first lesson was “when in doubt, philosophy can help you out.”“If you don’t know the answer to something, I have only discovered that philosophy helps,” Sullivan said. “Philosophy, at least for the last 2,000 years of it, has been in the business of trying to help people figure out how to be happy. Sometimes the philosopher’s advice is really hard to understand, but it gives me comfort to realize that people have been dealing with a lot of these really big problems for a long time.”Sullivan’s second lesson spoke to the difficulty of life between the ages of 18 to 22. “There is lots of stuff that you need to figure out that other people have figured out already but you have not, and it’s risky,” she said.She encouraged students to ask themselves a series of questions when seeking life advice.“First, you should think about the kinds of problems you are really facing,” Sullivan said. “Second, you should ask yourself whether that advice is helping you with the concrete problem you’re dealing with now. Three, you should ask yourself if the person giving you advice has any capacity to understand your problem.”She said if the answer to these two questions is “no,” then Aristotle says we should “dump it,” as advice should help us in the problems we actually face. Third, Sullivan said, “you were built to want (the right) things.”“Aristotle has this really great line in the opening of the Nicomachean Ethics where he says, ‘Here is the big problem that we all face in our lives, and especially people that are starting off in life: what are we going to aim at,’” she said, paraphrasing the philosopher.Her fourth lesson concerned the intertwined nature of thinking and loving.“If you take the Greek philosophers seriously, and if you think really seriously about what it means to try to find the desires that aren’t going to fail you, you start to realize that thinking and loving are really closely interconnected,” Sullivan said. “That’s something you can use to your advantage when you’re in college.”People actually have a lot of time to think in college, Sullivan said.“Thinking isn’t an emotionless, boring activity,” she said. Sullivan then led students in two activities, asking them to think about a 15-second moment of happiness from their lives. She encouraged students to repeat this exercise to help them “not lose their souls” while at Notre Dame. She then invited students to turn to the person they were sitting next to, introduce themselves and tell their neighbors they were glad to meet them. She encouraged students to make a wishlist for their lives and then reorder the items.“Think about what you really want,” Sullivan said. Sullivan’s talk was followed by a short statement from three current Sorin Scholars who spoke to their own undergraduate experiences and achievements. Tags: Dr. Megan Sullivan, god and the good life, happiness, philosophy, Sorin Scholars, success read more