Speaker likes U.S. energy future, dislikes nation's debt problem
CHAMPAIGN — Stephen Moore is bullish on the potential of technology and human creativity — but not so hot on the public sector.
Moore, an editorial page writer for The Wall Street Journal, told University of Illinois students Monday that now is "a great, great time to be alive."
New technologies are being adopted at faster and faster rates, and cures for cancer and other afflictions are in the offing, he said.
Some of the biggest developments are in the U.S. energy sector, with massive finds of oil in North Dakota and natural gas in West Virginia and other states, he said.
Hydraulic fracturing and horizontal drilling technologies have made it possible to tap those reserves.
Moore said if trends continue, the U.S. will become a net exporter of natural gas in two years.
Plus, he said, the nation has the capacity to become a net exporter of oil in 10 to 12 years — a big reversal from its current role as a net oil importer.
Moore called those developments "an incredible game-changer."
The strides in energy will have "a huge impact for other industries," fueling a manufacturing renaissance that is already under way, he said.
Moore, 52, who received his undergraduate degree from the University of Illinois, writes about taxing and spending policy and frequently appears on Fox News.
He counts himself a fan of the late UI Professor Julian Simon, who was optimistic that pressing world problems could be solved through creativity, technology and growth.
What concerns Moore most at this point is how the nation will solve its debt problem.
Moore, a Republican, criticized both parties for their practices. He knocked Republicans for massive spending during the presidency of George W. Bush and called President Barack Obama's $800 billion economic stimulus package "one of the biggest mistakes in history."
Moore said: "We need to increase tax revenues, but we have to do it through growth."
To get its fiscal house in order, the U.S. needs economic growth of 4 percent to 5 percent, not the 1.5 percent growth it's had recently.
"You'll never balance the budget with 2 percent growth," he said.
The best way to achieve that growth, he added, is to lower tax rates and broaden the tax base.
Moore said he's fine with closing loopholes for people with high incomes, but not with raising rates. Higher marginal tax rates create a disincentive to earn and invest, he said.
"Where you get the most bang for the buck is cutting the corporate tax rate," he said, adding that Sweden recently adopted a lower corporate tax rate than the U.S.
When asked about the possibility of a budget compromise in Washington, Moore said he thinks there will be one next year and he's hopeful for both tax reform and entitlement reform in 2013.
He said policymakers should note the massive increase in wealth that occurred in the U.S. between 1982 and 2000, as measured not only by the stock market, but also by job creation and family income.
Moore attributed that growth to "dramatic" reductions in both the inflation rate and tax rates.
Moore said there's "a total cloud of fear over the U.S. economy," with investors in a "hyper-risk-averse mode," mindful of what happened in 2008.
But he said there will eventually be a turning point when the cloud of fear dissipates, "especially if there's regime change in November."
That will yield a "boom like you've never seen," with money pouring into the markets, he predicted.
On another matter, he cited big inflationary increases in education and health care, "the two industries most controlled and owned by government." He said the inflation rate in many other sectors is falling.
Moore's lecture was sponsored by the UI Center for Business and Public Policy, with support from the Academy on Capitalism and Limited Government Foundation.
The center will sponsor a lecture from the other side of the political aisle Oct. 25 when Austan Goolsbee, former chair of Obama's Council of Economic Advisers, delivers the David Kinley Lecture on campus.