[At this point, the President was interrupted by shouting from someone in the audience.]

I thank all of you for certainly a warm Virginia welcome. You know, it's a pleasure -- --

[At this point, the audience began chanting and then applauded the President.]

Thank you.

I couldn't hear what the words of dissent might have been, but, once again, aren't we happy that we can live in a country where somebody, by himself, can dissent with the crowd and know that the roof isn't going to fall in. Of course, I'd like to have a chance to convert him. [Laughter]

You know, it's a pleasure to be able to travel such a short distance and still come so far from the Washington state of mind. [Laughter] On this side of the river, only horses suffer from Potomac fever. [Laughter] Hard work, love of families, belief in God are the values at the center of life in Virginia. And with your help and that of your Representatives, we're going to return respect for those values to our National Government.

I want to thank you for your able Republican delegation. They serve Virginia and they serve the Nation well. I have had -- and rely on -- the advice and support of leaders like your distinguished former Governor, John Dalton, and the Senator who had to stay on the job, John Dalton [Warner, White House correction], Representatives like Tom Bliley and Ken Robinson and Paul Trible, who -- if you do what I think you're going to do -- will be Senator Paul Trible. I'm counting on the people of Virginia to reelect these fine House Members and to send Paul to the United States Senate this November.

In this election and throughout this decade, the American people will be asked to reaffirm our difficult course toward national renewal. The vote of every citizen will matter, and every ounce of individual commitment will count. And make no mistake: The choice the American voters have this year is just as important as the one they had 2 years ago. It's a clear choice, as you've been told already, about the kind of nation that we will be -- whether we will continue our sure and steady course to put America back on track, or whether we will slide backward into another economic binge like the one which left us with today's pounding national hangover.

Not that this campaign doesn't have its humorous side. You should hear some of the things that the candidates on the other side have been saying. They're getting more imaginative every day. You know, it won't be long before they will have convinced themselves that the astronomers are correct, those astronomers that believe in the ``big bang theory,'' that the whole universe and the world suddenly came into being through a big explosion, a big bang. In their version, history began with a big bang on January 21st, 1980 [January 20, 1981, White House Correction] [Laughter] According to them, the economic crisis emerged full-blown by spontaneous generation just a few seconds after I took the oath of office. Well, with all respect to astronomers, let's take a look at history. You heard some already, and it's all true.

In the 4 years before we got to Washington, the entire Government of the United States was in the hands of those today who are the most vocal of our critics. They controlled the Presidency, the United States Senate, the House of Representatives, all the committees of the Congress, the entire executive branch, the hundreds of departments, agencies, and administrative units responsible for running the Federal Establishment -- something no Republican administration has experienced for nearly 30 years.

When my friends on the other side began this power monopoly, America was enjoying economic stability that would be a source of envy today. Inflation was running at 4.8 percent at the end of 1976, as Gerald Ford left office. And the prime interest rate was under 7 percent. You could get a home mortgage for 9 percent.

But in these 4 years of Democratic monopoly -- and let me point something out. When I use the term referring to the opposition party, the Democratic Party, I spent most of my life as a Democrat. I know that others in this room did, and I know there are others in this room who still are members of that party. But what has happened is a great gulf has developed between the leadership of the Democratic Party and millions of rank-and-file Democratic Party members who aren't in lockstep with that leadership.

Inflation shot up to over 13 percent in 1979 to an astonishing 18 percent by January of 1980. Those in charge of the government managed to do something that had not been done in over 60 years -- they gave us 2 years of back-to-back, double-digit inflation. Interest rates began their nightmarish climb. From less than 7 percent in '76, they climbed to 21\1/2\ percent in 1980. Mortgages went as high as 17\1/2\ percent, and homebuying came to a drastic halt.

These were the highest interest rates in over a century. Productivity dropped in '79 and '80, and that was the first 2-year-in-a-row drop in productivity in our recorded history. The savings rate went down. The rate of increase of industrial production dropped every year. The rate of increase in our gross national product dropped for 3 years straight. High taxes smothered the incentives of individuals and businesses. Taxpayers began paying the due bills for runaway inflation, as it kicked them relentlessly into higher income tax brackets.

Think of it. Your taxes actually doubled in the 5 years before we came to Washington. A Democratic President and a Democratic Congress passed the single highest peacetime increase -- tax increase -- in the history of the Republic. The ultimate victims, of course, were American workers and their families and the senior citizens they professed to care so much about. The grim results were that both real wages and weekly earnings decreased between 1976 and 1980. So much for liberal fairness and liberal compassion for the working people of this nation.

Yes, America went backwards during those 4 Democratic years. The actual standard of living went down. In many ways, they marked the culmination of decades of overindulgence by the liberal Washington establishment. Government had spun out of control like a washing machine out of balance, and the programs just grew automatically. Regulations became more complex and added untold billions in new costs. Deficits caused our national debt to bulge rapidly toward the 1 trillion-dollar mark. New departments sprang up like toadstools after a rainstorm. [Laughter] Washington increasingly swallowed up the prosperity of the entire Nation.

Families were driven in the evening to the kitchen table to try and figure out -- they sat around that table -- how to cope with the inflation that robbed their buying power at the same time it reduced their spendable earnings. Young couples didn't dream of new homes; they dreamed of just surviving. Small businesses were hit especially hard. The only sure thing was the unstoppable fattening of the United States Government.

In the year before I took office, Federal spending increased by 17 percent in that single year. How many of our fellow citizens were able to say that their incomes or their pensions or their savings had gone up by 17 percent?

This legacy was the inevitable result of the liberal Democratic philosophy that the Federal Government could be all things to all people. The Congress had been under virtual one-party control for a quarter of a century, a spendthrift era of busted budgets and fatter and fatter government. For every new tax, there were always plenty of new ways to spend it. The Washington establishment believed that the only good dollar was the one taken out of a taxpayer's pocket. As a matter of fact, they began to talk about, and still talk about, the legitimate deductions that you're permitted by law in computing your income tax as ``tax expenditures,'' meaning that all of your money belonged to them, they only let you keep what they decided you should keep.

Today, right now, we're all paying the penalty of those tragic excesses. Nearly 11 million people are out of work, and I share their suffering and frustration.

Every American should be shocked at the economic chaos which created today's needless results. Words cannot tell how painful it is to me that each day, for millions of Americans, is one of hurt and indignity because they want to work and can't find a place where they can sell their ability to work.

You younger people: I grew up in the era of the Depression, and there are others in this room who did, also. Anyone who tells you that we don't have compassion for someone who's lost his job doesn't know what they're talking about, because we saw that great tragedy -- [applause] -- --

We all wish there were some quick and easy cure for this terrible economic illness that was so long in the making. For months now I've been biting my tongue while I've listened to all those strident speeches about how we've purposely thrown people out of work. Well, it seems to me that the people who have created the mess we're in, the same politicians who took us down the path of guaranteed economic disaster, are the last ones who should be delivering sermonettes on the cause of unemployment.

From our very first day of office, we've been working to undo the economic wreckage they left behind. As a matter of fact, when I finished taking the oath on that inaugural day, I turned around and went back into the Capitol. We found a table, and I sat down and signed an Executive order right then, freezing the size of the Federal Government.

To get control of the spending, encourage incentives by lowering taxes, to stop the unwise regulations and start America on the road to expansion and growth once again -- that is what we've been trying to do since that January day.

Our first urgent priority was to break the back of inflation, because it touched on nearly every other economic problem we had. And we did. We have more than cut it in half -- 3.3 last month, but since January, it has averaged 5.1 percent.

And as you were told, the interest rates have also dropped by nearly 40 percent. People are saving more, and they're paying lower taxes than if we had not taken the action we did. The prime interest rate isn't 21\1/2\; it has been 13\1/2\, but yesterday the Bankers Trust lowered it again to 13 percent.

This devastating recessionary virus, one that many economists believe started and has continued since 1979, has begun to show signs of finally running its course. For 4 months in a row now the leading economic indicators have been encouraging. Confidence has soared in the stock market; it's gone up 140 points in the last 7 weeks. These are positive signals. While there may be an occasional blip, the pattern is firmly established.

I believe deeply that we can put this nightmarish economic calamity behind us if we have the strength to stick to our course. But until there's a job for every American who wants to work, and as long as plants and machinery lay idle, we cannot let up in our efforts. From the very beginning I've cautioned that this work of recovery would be arduous and long. Progress would come slowly, but it would come steadily.

This has been a time of great testing, and a time when millions of Americans have displayed enormous courage and patience. The road to economic recovery is never easy, but we have made progress. Yet this election season has brought a clamor of negative voices that nothing seems to please. The cuts in spending, they say, are too deep. Taxes are too low. Their favorite special interests have been hurt. Despite all their failures of the past, they still oppose our comprehensive reform measures, and what is their alternative?

Well, the Congressman was right. As far as anyone can tell, their answers have mostly been recommendations to repeat their own past failures, artificially stimulate the money supply, more spending on what they call job programs, but at the same time raise taxes -- in short, everything they were doing between 1977 and 1980.

Well, I've got news for them. Double-digit inflation is no alternative; 21\1/2\-percent interest rates are no alternative; another trillion dollars of national debt is no alternative; higher taxes are no alternative.

To my liberal friends I say: You can't create a desert and then hand someone in the middle of that desert a cup of water and call that compassion. You can't pour billions of dollars into dead end, make-work jobs and call that opportunity. You cannot build up years and years of degrading dependence by our citizens on the government and then dare to call that hope. And believe me, you can't drive our people to despair with crises that wipe them out or taxes which sap their energies and then boast that you've given them fairness.

We spent in those years -- that 7-year period I've talked about -- we have spent $66 billion on job programs, government job programs, and during those times unemployment continued to increase, and it averaged 7 percent over those 7 years.

We've been down all those roads. Let's not make those same mistakes again. This time, let's do the job right.

We Americans have been sorely tested by these past few years of discouragement. But we've never been quitters, and we're not about to quit now.

I hear all those voices every day that say we can't succeed. Well, if we only put our heart and courage to the test, I say we cannot fail.

To those who are fainthearted and unsure, I have this message: If you're afraid of the future, then get out of the way, stand aside. The people of this country are ready to move again.

That wonderful Old Testament book of Ecclesiastes teaches us that ``to everything there is a season.'' As I've traveled around the country, I've become more and more convinced that today America stands at the dawning of a season of hope. It is the hope which springs from the vitality of the American spirit, a hope that will fulfill the richness of all the promise that is within us.

Standing together, steady and unfaltering, we'll turn this new season of hope into the renewal of all the dreams and opportunities that our nation was placed on this Earth to provide.

To these young people I want to say I have a dream that I hope all of you share -- that before we step down and they take over we will at least have made some payments to reduce that trillion-dollar debt. We will not keep on increasing it on down through the years to dump it on their backs.

Virginia is rich in tradition. I think everyone in America knows that and respects the traditions of this great State. You have a 50-year tradition, and certainly it crosses party lines, a tradition that for 50 years you had a Senate seat that was occupied by two Senators in succession, father and son, who were true to all of the things that we've been talking about and all of these ideals of fiscal responsibility and integrity and, yes, the spiritual revival of this country.

I think the best way to continue that tradition on beyond 50 years is to send Paul Trible to the United States Senate.

Thank you, and God bless you.

Note: The President spoke at 12:51 p.m. at the Richmond Arena following remarks by Representative Paul S. Trible, Jr., Republican candidate for the U.S. Senate from Virginia.

Following the rally, the President went to the Holiday Inn for a fundraising reception for Representative Trible.