I must say that I stand here with mixed emotions. I'm filled with admiration and respect for the things that you were telling me about your State. But, at the same time, when you opened with all of those words about the prevalence of Ph.D.'s here, that always touches a nerve with me, because when I got my bachelor's degree in college, some 25 years later my alma mater awarded me an honorary degree and compounded a sense of guilt I had nursed for 25 years, because I always figured the first one was honorary. [Laughter]

But it is wonderful to be back in Nashville, world capital of bluegrass and country music and the proud home of a man that we'll soon honor with a giant happy birthday, Mr. Roy Acuff.

Whenever I visit your Volunteer State, I get a real tug knowing that I'm standing on this hallowed ground of heroes. The spirit of Tennessee was Davy Crockett daring to push back frontiers and open up the West -- they were a different kind of frontier then -- Andrew Jackson, knowing one man with courage makes a majority, blazing a revolution that put power back in the hands of the people. And today that spirit is alive in an economic expansion that's creating hope and bringing Tennessee's unemployment down. So, I salute you and I salute your fine Governor.

For people seeking the newest frontiers, my advice is come to the Oak Ridge-Knoxville high-tech corridor, and you'll see America at its best. Believe me, when it comes to encouraging growth, expanding opportunities, and charting a course for excellence in education, Lamar Alexander and the people of Tennessee are giving a lesson in leadership to all America. You are creating the greatest wealth we could wish for -- wealth of knowledge. It fuels a mighty tide of progress and carries hope for an optimistic future to people here and everywhere.

From the days of Bunker Hill to the Conestoga wagon, the cotton gin, smokestack industries, the Manhattan Project, and now the world of advanced and high technology, the American Revolution has been carried forward in the brave dream of pioneers -- people with the faith, courage, and vision to invent the future and the marketplace of tomorrow.

Ours has never been a revolution poisoned by hatred and the will to conquer, but one rising from the deepest yearnings of the human spirit to challenge the limits of knowledge and to use the power of discovery for our most noble and generous impulses for decency, progress and, yes, for peace.

We see it in that high-tech corridor where your industries have become America's new trailblazers -- new energy-related systems to make energy more affordable; radiation detectors to monitor radiation and pollutants; disease-free plant varieties that can greatly expand our nursery stock and woodlands; vital research against cancer; and medical innovations, like CAT scanners, to detect diseases of the brain and other vital organs.

You know, I can't help but wonder if a lot of the problems that are plaguing this nation wouldn't disappear if we could just borrow the people and companies in this corridor and put them inside the beltway in Washington, DC. There's nothing the United States of America can't do, if those Doubting Thomases would just stand out of the way and get out of our way.

Together, your small and large businesses throughout Tennessee are taking us another step into the future -- new markets, new jobs, and valuable knowledge to help us compete for leadership in the world area of technological development.

I don't think you need convincing that America has no mission of mediocrity. We haven't come all this way just to wind up a second-best nation. Leave that tired vision for the fainthearted souls. We're not in this historic competition just to survive or just to do well, America is in this to win. The crown we're striving for is not a crown of pride or glory; ours is a battle for human progress, for excellence at every level of society.

Sons and daughters of Tennessee can meet this challenge. Together, we can blaze this trail and win this battle. And if we're to honor the tradition of Crockett and Jackson, America must win it, and I believe we will win it.

I know in Europe -- when you told me about your experience there, Lamar -- at the recent summit conference that I attended, I know that I had been advertised in the media as going to face a real grilling and all kinds of criticism from my fellow leaders of the industrial nations that I'd be meeting with. It didn't happen. I had the same experience you did. They were all waiting there to find out, ``How'd we do it?'' Well, the word, again, is a single word, really -- freedom.

Look how far we've already come. In a single generation, we have freed ourselves from the bonds of Earth. We've set our footprints on the surface of the Moon, used our instruments to explore space, the Sun, and our sister planets.

Satellites enable us to communicate with each other at a moment's notice virtually anywhere on the globe. We can anticipate tomorrow's weather and prepare for it. And thousands of practical applications of space and aeronautical technology are touching our lives, from lifesaving vests for firemen to aerial scanning techniques to locate and identify everything from schools of fish to mineral deposits to healthy timberland.

New materials from natural resources like carbon and silicon are replacing expensive manufactured products. And engineers are using them to reduce the weight of modern cars, with consumers getting the benefits of more miles per gallon.

Computers using microchips are redefining our world as they become common in the workplace, community, also, and in the classroom. Many children have access to more computer power than most professional scientists and engineers had in their laboratories at the beginning of the space age.

In medicine, we're seeing the vision of technology with a human face. The pioneer field of computer-controlled walking has given hope to thousands of paralyzed Americans that someday they may walk again.

Doctors can now use sound waves to monitor babies inside the womb, ensuring safer pregnancy and delivery for the mother and better health for the newborn. We've learned how to send electrical impulses to targeted nerve centers or particular areas of the brain to provide relief from pain. And we've developed a system that can administer medication automatically within the body.

We could put a price tag on the value of these human benefits, but who would want to do that? Who can even imagine the wonders that lie ahead if we just have the faith and the courage to push on. While I was growing up, the Model A was just replacing the Model T. And now, a child may grow up to see space travel become commonplace.

The secret weapon of the technological revolution is productivity, power -- awesome power. Each breakthrough in knowledge lifts us to a new, higher plateau, paving the way for great gains in productivity. Agricultural economies barely advance; industrial economies move forward in inches and feet; and an advanced technological economy can leap forward.

Working in the zero-gravity of space, we can manufacture in 1 month's time lifesaving medicines that it would take 30 years to manufacture on Earth. And we can manufacture crystals of exceptional purity that may enable us to produce super computers and make even greater breakthroughs in productivity.

But some economists and politicians are afraid of growth, afraid it will reignite inflation. Well, I'm afraid they may suffer from time warp. They seem to be stuck in one period, while all of us are entering another. They seem to see our economy only as an old and quivering thing in the industrial age, rather than a strapping young adolescent beginning to flex its muscles in the technological age.

We don't need economic doctors telling us we must ration our strength. We need economic doctors who will help America build her strength. And we don't need more politicians insisting we have deficits because you're not taxed enough. Those deficits ballooned from an economy that didn't grow enough and from 50 years of a government that's been spending too much.

Some people have labored so long at making government bigger, they've developed a knee-jerk addiction to tax increases. And every time their knee jerks, we get kicked -- [laughter] -- and that's when growth suffers most.

I'm asking for your strongest support for two long-overdue reforms, supported by the American people, but resisted by the Democratic leadership -- a constitutional amendment mandating that government spend no more than government takes in and a line-item veto giving a President the power to veto individual items in appropriation bills. Your Governor has it. I had it when I was the Governor of California. And I remember with great joy the kick I got out of vetoing -- [laughter] -- more than 900 times in those 8 years, and never having one of those vetoes overridden. So remember, you don't need, with regard to some in Washington, to make them see the light, just make them feel the heat. [Laughter]

We came to Washington determined to spark new growth in the economy and slow the growth of government. Well, with your support and Senator Baker's, we've had 21 straight months of economic growth. That is the best expansion since World War II. Government spending growth has been cut by more than half; inflation at 4.1 percent is down by two-thirds; interest rates are down; the deficit is coming down and, yes, continued growth will keep it coming down. So, pardon me, but somebody back there must be doing something right.

But these aren't my victories, they're your victories, America's victories. And that's why I want to offer a little friendly advice to our critics: Rather than saying things that always seem to run America down, how about giving the American people a pat on the back?

Government must encourage technological growth by supporting research and development, particularly in our universities, to train tomorrow's leaders. Between 1981 and 1985, Federal investment in basic research will have increased almost 30 percent in real terms. We'll carry forward that strong commitment, continue to support tax credits for industrial research and development expenses, and strive to lessen concerns that cooperative research and development between companies may violate antitrust statutes.

Let's remember that technology is born from capital, and capital requires incentives for risk-taking and investment. We've seen dramatic proof of this relationship. The 1978 capital gains reduction, followed by our 25-percent reduction in tax rates and the shortening of depreciation schedules for business investment, have given an enormous shot in the arm to risk-taking and entrepreneurship in America.

In 1977 the venture capital industry was almost dead, with commitments of only $39 million. By 1983 the new incentives had increased those commitments to $4\1/2\ billion -- more than 115 times as much. New business incorporations set a record last year, will probably do so again this year. The rate of business investment is the strongest in 40 years; productivity is rising; America's created 6 million new jobs in the last 20 months -- and I know I stole it from Al Jolson, but you ain't seen nothin' yet.

If the Democratic candidate had had his way, the top rate on capital gains would not have been cut from 49 to 20 percent, it would have been spiked up to 70 percent. His adminstration fought the historic reduction in capital gains and demanded the higher rate, which they said would bring in more revenue. Well, we're getting more revenue today at the new lower rate than we were getting before. And that's the secret of good tax policy.

The choice today is just as crucial. Will we heed their call to raise tax rates, penalizing risk-taking, investment, and increasing the taxing burden on working families, farmers, and small businesses and corporations -- the same antigrowth, proinflation policy that brought our economy to its knees by 1980? Or will America go forward and challenge the limits of growth with an historic simplification of the tax system, making it fairer, simpler, and lowering everybody's income tax rates so we can have more jobs, growth, and opportunity for all the people of America?

You know, Roy Acuff composed a song called ``We Live in Two Different Worlds.'' And the choice in 1984 is between two very different worlds. They see America wringing her hands; we see America raising her hands. They see America divided by envy, each of us challenging our neighbors' success; we see an America inspired by opportunity, each of us challenging the best in ourselves. We believe in knowing when opportunity knocks; they seem determined to knock opportunity.

Well, I believe the American people are saying, ``Don't hold us back. Give us a chance and watch what we do.'' America has always been greatest when we dared to be great. And you can feel a new spirit in this land to excel again. The new patriotism is a mighty force for good, drawing us together -- all of us, from every race, religion, and ethnic background -- giving us courage and confidence to surge toward great new challenges in the future.

I believe America can and will meet our number one challenge in space: to develop a permanently manned space station and to do it within a decade. We can conduct new research, explore distant planets, unlock the vast potential for commercial ventures, and do it all for the sake of a more peaceful, prosperous world.

As American technology transforms the great black night of space into a bright new world of opportunities, we can use our knowledge to create a new American opportunity society here at home. We can ensure that every person has not only an equal chance but a much greater chance to pursue the American dream.

We can build an America that offers productive, secure job opportunities for all our fellow citizens, from assembly line workers in our older industries to research scientists in new industries such as biotechnology, robotics, and information processing.

If we strengthen incentives, invest fully in the new technologies, and reach for great breakthroughs in productivity then, yes, we can and will outproduce, outcompete, and outsell anybody, anywhere in the world. We can ensure adequate supplies of affordable energy, because America must never again be held hostage by a foreign cartel. We can apply new agricultural technologies to preserve our soil and environment, and dramatically enhance crop yields for the benefit of millions who look to us for help and hope.

Our nation is more than 200 years old, but somehow America has never been younger, never been more filled with hope. Everything is before us. And if we keep America free, everything will be possible. The land that President Lincoln called ``the last, best hope of man on Earth,'' will rise to meet her greatest days, and the eagle will soar.

Well, I thank you today for your warm welcome, and thank you for what you did for Tennessee and for America, and what you're doing for America and your State every day of the year.

Thank you again, and God bless you all.

Note: The President spoke at 11:19 a.m. in the Memphis Room at the Opryland Hotel.

Following his remarks, the President met at the hotel with local Republican leaders and Reagan-Bush campaign leaders.