And so, the question:  If the fundamentals are in place, what now?  Well, two things.  First, we must understand what’s happening at the moment to the economy.  Our current problems are not the product of the recovery program that’s only just now getting underway, as some would have you believe; they are the inheritance of decades of tax and tax and spend and spend.

Second, because our economic problems are deeply rooted and will not respond to quick political fixes, we must stick to our carefully integrated plan for recovery.  That plan is based on four commonsense fundamentals:  continued reduction of the growth in Federal spending; preserving the individual and business tax reductions that will stimulate saving and investment; removing unnecessary Federal regulations to spark productivity; and maintaining a healthy dollar and a stable monetary policy, the latter a responsibility of the Federal Reserve System.

The only alternative being offered to this economic program is a return to the policies that gave us a trillion-dollar debt, runaway inflation, runaway interest rates and unemployment.  The doubters would have us turn back the clock with tax increases that would offset the personal tax rate reductions already passed by this Congress.  Raise present taxes to cut future deficits, they tell us.  Well, I don’t believe we should buy that argument.

There are too many imponderables for anyone to predict deficits or surpluses several years ahead with any degree of accuracy.  The budget in place, when I took office, had been projected as balanced.  It turned out to have one of the biggest deficits in history.  Another example of the imponderables that can make deficit projections highly questionable—­a change of only one percentage point in unemployment can alter a deficit up or down by some $25 billion.

As it now stands, our forecast, which we’re required by law to make, will show major deficits starting at less than a hundred billion dollars and declining, but still too high.  More important, we’re making progress with the three keys to reducing deficits:  economic growth, lower interest rates, and spending control.  The policies we have in place will reduce the deficit steadily, surely, and in time, completely.

Higher taxes would not mean lower deficits.  If they did, how would we explain that tax revenues more than doubled just since 1976; yet in that same 6-year period we ran the largest series of deficits in our history.  In 1980 tax revenues increased by $54 billion, and in 1980 we had one of our all-time biggest deficits.  Raising taxes won’t balance the budget; it will encourage more government spending and less private investment.  Raising taxes will slow economic growth, reduce production, and destroy future jobs, making it more difficult for those without jobs to find them and more likely that those who now have jobs could lose them.  So, I will not ask you to try to balance the budget on the backs of the American taxpayers.