I want you to know that this has been a day that -- if I said, Neil, you wouldn't know who I was talking about -- my brother, Moon, and I will long remember. It's a day of warmth and memory, a day when the good things that have happened in our lives all seem very close and very real again.

We've just come from Dixon, where I attended my biggest birthday party ever. It was the 34th anniversary of my 39th birthday. [Laughter] And I had what every man who has that many candles on his birthday cake needs around him -- a large group of friends and a working sprinkler system. [Laughter]

And now we're here for Eureka's birthday. Legend has it that after Ben Major led a wagon train here, he sunk an ax into the first tree he felled and said, ``Here we'll build our school.'' And that was, as you've been told, more than 129 years ago. And just to end any speculation going on among the undergraduates, no, I was not a part of that original wagon train. [Laughter]

It's always wonderful to return to Eureka. People ask me if I'm looking back at my college years, if I can remember any inkling that I would someday run for President. Well, actually, the thought first struck me on graduation day, when the president of the college handed me my diploma and asked, ``Are you better off today than you were 4 years ago?'' [Laughter]

Besides being wonderful, coming back to Eureka is also a great temptation. Sitting in a college audience can sometimes be dangerous duty. Something about your youthfulness and the bright, fresh hope it symbolizes makes guest speakers like myself very free with their reminiscenses and very reluctant to sit down.

You've heard, I'm sure, that I like to tell an anecdote or two. Well, life not only begins at 40; so does lumbago and the tendency to tell the same stories over and over again. [Laughter] But, I promise I'll try to be brief today, so rest easy. You're lucky. I have to be in Nevada tonight.

But I don't want to miss this opportunity to share with you some thoughts on the changes that have happened to America in the 50-odd years -- and some of them were odd -- since I left this campus and to offer too some thoughts on how we can shape those changes to serve the cause of human freedom -- to inspire, not burden, those who come after us. I can't think of a better occasion for such reflections.

In addition to Founder's Day here at Eureka, we're also marking the first in a series of speeches sponsored by Time magazine to commemorate its 60th anniversary. For 60 years, Time has lived up to what Henry Luce and Briton Hadden envisioned when they founded the magazine in 1923: a weekly digest of news, put together with much more care and perspective than is usually possible under the deadline pressure of daily journalism. Well, if it's important for news organizations like Time to keep in mind the value of perspective, you can imagine how important it is for those of us in public life to remember that proximity to daily events can be as much a handicap as an advantage in understanding their meaning.

And that's what struck me when I was thinking about what I wanted to say here today: the ease, the unknowing grace with which my generation accepted technological and political changes that so radically transformed our world. We didn't know then that ours was to be one of those infrequent generations that would preside over a great transition period. We went in a single lifetime literally from horse and buggy to space travel.

In 1932, for example, I graduated from Eureka and landed a job in radio. Though I didn't realize it at the time, I had become part of the communications revolution that was shrinking the dimensions of my world even more than radio's successor, television, would shrink your own. Already my generation's sports idols, celebrities, newsmakers, and heroes had come in large measure from the world of radio. It seemed a perfect career choice.

Yet if I'd only stopped to think about it, I would have remembered back in my boyhood days, just a few short years before, when my friends and I followed our neighborhood genius around town in Dixon trying to pick up radio signals with his jury-rigged crystals, aerial, and headphones. Can you imagine our sense of wonder when one Sunday afternoon, down by the river there in Dixon, we heard the sounds of radio for the first time, an orchestra playing over KDKA several hundred miles away in Pittsburgh?

And yet it took only a few years for that sense of wonder to dissolve. Radio, which was heard in only 60,000 households in 1922, was heard in almost 18\1/2\ million households by 1932, my graduation year.

By that time, of course, the market had crashed, the depression years were upon us, and over those radio sets now sitting in every parlor and living room in the nation came the rich, reassuring tones of Franklin Roosevelt. All of us who lived through those years can remember the drabness the depression brought. But we remember, too, how people pulled together, that sense of community and shared values, that belief in American enterprise and democracy that saw us through. It was that engrained American optimism, that sense of hope Franklin Roosevelt so brilliantly summoned and mobilized.

It was a time of economic emergency, and there seemed a certain logic to arguments that the National Government should take onto itself new and sweeping prerogatives. In the grip of that emergency, many of us could not see the enormous and sometimes harmful -- oftentimes harmful political changes that this expanded role for the government would bring.

Once again, as I look back, the rapidity of that political change was as astonishing as the change brought by technology. At the start of that era, government collected in taxes a dime out of every dollar earned. Two-thirds of that dime went to State and local governments, with only one-third to Washington. Today government at all levels is collecting more than 40 cents out of every dollar, and the proportion is completely reversed, with two-thirds of that going to the Federal Government and only one-third for State and local governments.

My generation was a bit surprised to realize that the Federal Government, called upon in an economic emergency, was becoming an obstacle to economic progress. In addition to damaging the autonomy of local and State governments, usurping the rights of the people, the public sector had grown so large it was consuming our national wealth, discouraging energy and initiative, and suffocating the spirit of enterprise and resourcefulness that had always been at the heart of America's economic miracle.

In the depression years and their aftermath, we forgot that first founding lesson of the American Republic: that without proper restraints, government the servant becomes quickly government the master. I call it an American lesson, but actually it's much older. Cicero believed that the budget should be balanced, the treasury should be refilled, the public debt should be reduced, the arrogance of officialdom should be tempered and controlled. And since that time, many nations that failed to heed the words of that wise Roman have been brought to their knees by governments that borrowed and taxed their citizens into servitude.

But some peoples, like our Founding Fathers, revolted under such oppression. No one would understand better the danger of unchecked government power than those men. ``I am not a friend to a very energetic government. It is always oppressive,'' Jefferson said.

I remember quoting a few of these warnings long after I had left radio for films, television, and after-dinner speeches. And by that time, this reformed New Dealer could add one of his own: that a government agency is the nearest thing to eternal life we'll ever see on this Earth. [Laughter] And yet even as the decades of the fifties and sixties went by, and more Americans shared my concern, government grew like Topsy. In the decade of the seventies, Federal spending tripled, taxes doubled, and the national debt reached almost a trillion dollars. Government bureaus, agencies, and employment rolls kept multiplying. It had become too easy for politicians to promise more to win more, to spend their way to election victories.

Fortunately, that juggernaut of big government has now been slowed. During the last 3 years, we've brought skyrocketing spending back to Earth and reduced that enormous momentum toward big government. It wasn't easy, but measure the results by our ability to achieve what people once said was impossible. Federal spending growth has been cut by more than half. Government regulations have been cut by more than a quarter. And taxes on working Americans have actually been reduced and indexed to the rate of inflation. A working family earning $25,000 has $1,500 more in purchasing power today because of the cut in taxes and the lowered rate of inflation.

Today economic recovery is in full swing. But I hope we can use these moments of reflection today to understand the hard lessons we've learned since the depression about the growth of government. We need some basic reforms that will protect us against government's all too powerful tendency to grow and grow.

For one thing, it's time for the Federal Government, in the best federalist tradition, to learn something from successful experiments in the State and local laboratories of governments. The evidence from States and many municipalities is overwhelming. The executive branch needs a powerful weapon to cut out porkbarreling and special interest expenditures buried in large, catchall appropriation bills. It is time the Congress gave the President the authority to veto single-line items in the Federal budget, as Governors can do in 43 of our 50 States.

And second, politicians at the national level must no longer be permitted to mortgage your future by running up higher and higher deficits. The time has come to force government to live within its means. And I repeat my call today for making a balanced budget a constitutional amendment. When the Constitution was ratified, Thomas Jefferson voiced a regret that it did not contain a clause prohibiting the Federal Government from borrowing.

And finally, our tax system is now a nightmare of tangled requirements and twisted priorities. The American people want and deserve a tax code that is fair, rewarding, and simple enough to be understood by someone other than an army of green-shaded accountants and lawyers.

Now -- you know, I've been told that Einstein had to have help filling out his 1040. [Laughter] But now, in addition to the technological revolution marked by inventions like radio, and the political revolution brought on by the sweeping new scope of Federal power, there has been an additional development worth noting. That is the emergence of America's international role -- our sudden designation as the champion of peace and human freedom in the struggle against totalitarianism.

We didn't seek this leadership. It was thrust upon us. In the dark days after World War II when much of the civilized world lay in ruins, Pope Pius XII said, ``The American people have a genius for splendid and unselfish action, and into the hands of America, God has placed the destinies of afflicted humanity.''

Throughout World War II and most of the postwar era, though the adversaries changed -- from Hitler to Stalin -- there was still basic agreement on the moral imperative of defending freedom and the self-evident differences between totalitarian and democratic governments.

But that broad consensus of the Truman, Eisenhower, Kennedy years began to break down in the sixties and seventies. Partly in response to the Vietnam tragedy, an era of paralyzing self-doubt ruled out just and legitimate uses of American power -- even acts of self-defense.

The consequences of America's retreat were not long in coming. All of you can remember a few years back when the tragedy of the Iranian hostages was fresh in our minds; when around the world, especially in Afghanistan and Central America, Soviet expansionism proceeded unchecked; when our defenses had declined dramatically and some nations thought they could threaten or harm the United States with impunity.

We've changed this. We're trying to see to it that American citizens -- and it doesn't matter whether they're navy pilots in the Gulf of Sidra or medical students in Grenada -- can no longer be attacked or their lives endangered with impunity.

You know, Jeane Kirkpatrick, our Ambassador to the United Nations, has a wonderful story to explain how fundamental this reversal has been. She says that when she arrived at the U.N., someone asked her what would be different about our administration's foreign policy. ``Well,'' she said, ``we've taken off our `Kick Me' sign.''

And she was asked, ``Does that mean if you're kicked, you'll kick back?''

``Oh, not necessarily,'' she replied, ``but it does mean that if we're kicked, at least we won't apologize.''

Yet, it goes beyond just self-defense. When I spoke to the British Parliament a year and a half ago, I said our cause was human freedom; and so it has been -- in Europe, in Lebanon, in Central America. We've tried to bring a new honesty and moral purposefulness to our foreign policy, to show we can be candid about the essential differences between ourselves and others while still pursuing peace initiatives with them.

As I've said before, the democracies have their own serious injustices to deal with. But this should not prevent us from making the crucial moral distinctions between pluralist systems which acknowledge their own wrongs and shortcomings and systems that excuse their defects in the name of totalitarian ideology.

Our willingness to speak out on these distinctions is the moral center of our foreign policy. For us, human freedom is a first principle, not a bargaining chip. To fail to publicly enunciate the differences between totalitarian and democratic systems of government would be to forsake this moral high ground.

Peace remains our highest aspiration, and that's why arms control isn't enough. Arms reduction is our goal. And may I interject right here -- I, a few years ago, stood in this exact spot and made the announcement then that we were going to ask for arms reduction meetings with the Soviet Union to reduce the number of strategic nuclear weapons we both held. But then, as we have tried to communicate to the people of the Soviet Union, would it not be better to do away with nuclear weapons entirely? I think our new realism is an important means to this end.

Just as important, it reestablishes the basis of that broad foreign policy consensus that existed in the pre-Vietnam era when we understood the moral imperatives of defending freedom and the importance of taking totalitarian powers seriously.

You know, I've heard mentioned an observation by a distinguished French intellectual, Jean Francois Revel, on this point. Mr. Revel points out that some people are embarrassed to call the struggle between democracy and totalitarianism by its own name and prefer euphemisms like the ``competition between East and West'' or ``the struggle between superpowers.''

And here I want to point out that the political revolutions we've seen in America in domestic and international policy are only a reflection of a deeper trend, a trend that directly concerns the world that you have been part of here at Eureka, the world of ideas.

There has been a dramatic turnabout among the intellectuals. For most of my adult life, the intelligentsia has been entranced and enamored with the idea of state power, the notion that enough centralized authority concentrated in the hands of the rightminded people can reform mankind and usher in a brave new world. Well, I remember hearing one commonly held view of the Roosevelt era that all societies were moving toward some modified form of communism.

Well, we know now that the trend in America and the democracies has been just the other way. In the political world, the cult of the state is dying; so, too, the romance of the intellectual with state power is over. Indeed, the excitement and energy in the intellectual world is focused these days on the concerns of human freedom, on the importance of transcendent and enduring values.

In economics, for example, as the recent Nobel Prizes to Fredrick von Hayek, Milton Friedman, and George Stigler attest, the free market is again becoming the focal point. In political philosophy, a whole generation of intellectuals led especially by French thinkers like Revel, Jean Marie Benoit, Guy Sorman are rejecting the old cliches about state power and rediscovering the danger such power poses to personal freedom. Russian intellectuals ranging from majestic figures like Aleksandr Solzhenitsyn to noble crusaders like Vladimir Bukovsky have brought new attention to the horrors of totalitarian rule and to the spiritual desert that is communism.

Here in America, this revolution has been spearheaded for 30 years by intellectual presences like William F. Buckley's National Review. It's been supplemented recently by what's called the neoconservative revolution led by Irving Kristol, Midge Decter, Norman Podhoretz, and others.

In many ways, this counterrevolution of the intellectuals was predated by one of the most vivid events of my time, an event whose meaning is echoed in today's disenchantment with communism.

It involved, coincidentally, an editor of Time magazine, Whittaker Chambers, who in public testimony in 1948 named former high U.S. Government officials as spies. He was not believed at first, but the inexorable power of the truth was slowly felt, and overwhelming evidence led a jury to convict one of those former officials of perjury.

In Chambers' autobiography, ``Witness,'' he added a sequel. Chambers marked the beginning of his personal journey away from communism on the day that he was suddenly struck by the sight of his infant daughter's ear as she sat there having breakfast. And then, he said, he realized that such intricacy, such precision could be no accident, no freak of nature. He said that while he didn't know it at the time, in that moment, God -- the finger of God had touched his forehead.

And that is why Chambers would write that faith, not economics, is the central problem of our age and that ``the crisis of the western world exists to the degree in which it is indifferent to God.'' The western world does not know it, but it already possesses the answer to this problem, he said, but only provided that its ``faith in God and the freedom He enjoins'' is as great as communism's belief in material power.

Chambers' story represents a generation's disenchantment with statism and its return to eternal truths and fundamental values. And if there is one thought I would leave with you today, it is this: For all the momentous change of the last 50 years, it is still the great civilized truths -- values of family, work, neighborhood, and religion -- that fuel America's technological and material progress and put the spark to our enduring passion for freedom.

We're lucky to live in a time when these traditional values and faith in the future -- this sense of hope has been reawakened in our country. Yet, we have so much more to achieve, from assuring continued economic growth to developing space, America's next frontier, to keeping the peace and extending the borders of freedom. You in this room can play a personal part in these next chapters of human progress.

Now, I know you have a sense of excitement about all of this, and that's why it strikes me as odd that some people say today that college students are too conservative. Well, I think the truth is that you've discovered early in life what it took another great American writer, Scott Fitzgerald, many tumultuous years to discover.

Toward the end of his life he would write to his daugher in college about the importance of what he called the fundamental decencies. ``My generation of radicals and breakers-down,'' he said, ``never found anything to take the place of the old virtues of work and courage and the old graces of courtesy and politeness.''

I hope you'll remember that and something else F. Scott Fitzgerald once said, that America is ``a willingness of the heart.'' In the past half century, America has had its flirtation with statism, but we're returning now to our roots: limited government, the defense of freedom, faith in the future and in our God. With these values as guides, the future can be even more breathtaking than the last 50 years, because it will hold out not only the promise of sweeping improvements in mankind's material conditions but progress in the spiritual and moral realm as well. And that's why I hope that 50 years from now, should Time magazine ask you for your reflections, you'll be able to recall an era exciting beyond all your dreams. Believe me, there are great days ahead for you, for America, and for the cause of human freedom.

Thank you very much. God bless you, and may God bless this campus 'neath the elms. Thank you.

Note: The President spoke at 3:44 p.m. in the Reagan Physical Education Center gymnasium. In his opening remarks, the President referred to Henry Grunwald, editor in chief of Time magazine, who introduced the President; and Dr. Daniel D. Gilbert, president of Eureka College.

Following his remarks, the President attended a reception for donors to Eureka College. He then traveled to Las Vegas, NV, and the Sands Hotel, where he remained overnight.