It's a great pleasure to be with so many old friends. New Hampshire has a special place in my heart. I came here, as the Governor told you, in 1980 asking for your help. I know that many of you were active in that campaign, and together we started something that has changed the face of the Nation. And I'm going to continue trying to keep that change going until the Federal Government looks a little bit more like New Hampshire. Let me just take this opportunity to express to you my heartfelt appreciation. Thank you, New Hampshire.

A lot of political pros come up here to test the waters. And I don't know why -- I'm going to let that remind me of a story. I heard about one who was driving on a back road up here. And he looked out and noticed that there was a chicken running alongside the car, and he couldn't believe what he was seeing. So, he stepped on the gas, and the chicken kept up with him. Then he spurted ahead to about 70 miles an hour, and all of a sudden the chicken went by him and turned down a side road. Well, now he was really intrigued because he thought the chicken looked like it had three legs. So, he turned down the side road and found himself in a farmer's barnyard, and the farmer was standing there. And he pulled up, and he said, ``Pardon me, but did you see a chicken go by here?'' And he says, ``Yep. It's one of mine.'' Well, he said, ``I don't know whether I'm crazy or not, but tell me, it looked like it had three legs.'' And the farmer says, ``Yes, I breed them that way.'' He says, ``You breed them that way. Why?'' ``Well,'' he says, ``I like the drumstick; Ma likes the drumstick; and now we got Junior, and he likes the drumstick. I just got tired of fighting over them.'' [Laughter] And the fellow says, ``Well, how did it taste?'' He says, ``I don't know. We haven't been able to catch one yet.'' [Laughter]

Well, I hope that, unlike that farmer, the American people are beginning to enjoy the fruits of what we set out to do. There was a monster loose in our land back in 1980; inflation was running at double digits for 2 years in a row. It was destroying the economic well-being of our people and tearing at the fabric of our free society. But we've put that monster in a cage and brought inflation under control. The latest figures have it running something well under 4 percent, and we're not going to stop until there isn't any inflation at all. Have we made a difference? You bet we have.

Our economy was in serious trouble, and today we've enjoyed 33 straight months of economic growth. Retail sales are up; personal income is up; overall unemployment is down to 6.9 percent, and more Americans are working than ever before in our history. And if someone cynically says, ``Well, that's because there are more Americans today'' -- no, the employment pool is considered to be everyone, male and female, between the ages of 16 and 65 are part of the employment pool. Well, today the highest percentage of that employment pool is employed than ever in the history of our nation.

I think there's reason for optimism on the trade front as well. American industry has become vastly more efficient in the last few years. There's been a jump in worker productivity, and our tax rate reductions have stimulated heavy investment in new technology. This is the way to a more competitive America and lasting progress. What we can't be nor do is be stampeded into the dark hole of protectionism, igniting a trade war that will undercut everything we've accomplished and, in the long run, throw millions of Americans out of work. The last trade war we fought was back in the 1930's. We brought it on ourselves with the Smoot-Hawley tariff. It was called the Great Depression. I was looking for my first job in that Great Depression. What we must do, and what we're committed to do, is to see to it that there is free and fair and open trade on both sides of the ocean.

We have created more than 8 million new jobs since this recovery began 33 months ago. Many of those jobs flowed from a tidal wave of new small business activity. Well over a million businesses were incorporated in the last 2 years, most of them small operations, each the entrepreneurial dream of one individual. The grassroots free enterprise can keep America number one. On November 22d there will be a meeting of the White House Conference on Small Business here in Concord to get New Hampshire's input on how to further expand the opportunities on Main Street America. I urge you to participate and to make your voices heard.

New Hampshire already has a strong voice in Washington, and I want to thank you for sending one of the best delegations of any State to Washington. Senators Humphrey and Rudman and Representatives Smith and Gregg are doing a terrific job in your behalf and in behalf of America.

The way to progress is not, as some in the Nation's Capital would have us believe, to harness the energy of the American people by centrally directing it from Washington. Do any of you want to be harnessed by the Government planners?

Audience. No-o-o!

The President. The way to a better life for all Americans is to free the energy of our citizens, to let you the people make decisions with your own lives, and to do that by getting the Government out of your way. That's the plan for a more prosperous future. With freedom and the profit motive, there's nothing we can't do. It's frightening to think of where we would be now had we permitted government policies of the last decade, with their disastrous economic consequences, to continue. Instead, together we set America on a new course, and because we stuck to our principles, life is improving.

One of the accomplishments of which I am most proud is the turnaround that we've seen in poverty. When I campaigned here and throughout the country back in 1980, I said, and still firmly believe, the best cure for poverty is a strong and growing economy. The answer to helping those in need is not more welfare, government programs, and dependency; the answer is growth, jobs, and opportunity. Well, after years of progress, the number of poor people in America surged sharply upward in 1979, as the tax, tax, spend, and spend philosophy of the previous administration came on line. Well, it took time to put our program in place, time to reverse previous trends, but as our program began to take hold in 1983, when it was finally fully in place -- contrary to certain news accounts -- that increase in poverty, which had continued since 1979 and increased, ground to a halt. And last year we witnessed one of the largest reductions in the number of people living in poverty in history -- 1.8 million people lifted into new lives of progress and hope.

One of the cornerstones of our economic program was a 25-percent across-the-board reduction in the tax rates. In the years before we got to Washington, taxes had been skyrocketing. The Federal tax take doubled just between 1976 and 1981, siphoning off strength and resources from the private sector and undermining any chance for economic growth. Our economy was being bled dry, and the liberals acted surprised when they found the patient was barely breathing. Well, we put a stop to the tax spiral by offsetting tax increases built into the system. Without our changes, an average family of four with two earners in America would have paid $2,544 more in taxes in these last few years. I'm sure that being able to keep $2,544 more of your money has been good for you and for your family. Offsetting the built-in tax increases was a good start, and it's paid off with more investment, more jobs, and better times for everyone.

Well, that was step one; now it's time to finish the job. Taxes are still too high. The system is unfair and too complicated. It encourages people to channel their resources into tax shelters rather than job-creating investment. It's a boon to the tax experts and accountants and a drag on just about everyone else. There are politicians in Washington -- some of the same ones who constructed this tax code monstrosity -- who say that you, the American people, are not interested in tax reform. Well, that's why I came here. I want to simplify the system and overhaul it from top to bottom. I want to bring down the rates and close up the loopholes. Are those politicians right when they say you don't care?

Audience. No-o-o!

The President. Can I count on your support to finish the job that we began in 1981?

Audience. Yes!

The President. Thank you. You just made my day. Your representatives here and I will give them in Washington your message personally.

We propose to reduce the 14 tax brackets down to 3 -- 15 percent, 25 percent, and 35 percent. Virtually everyone will be paying at a lower rate. At the same time, we'll be closing loopholes that distort economic choices, do nothing to improve our economy, and are downright unfair. Now, let's not blame those who are using legal but unfair loopholes and writeoffs. Let's just change the system so all of us are treated the same.

Now, one of the writeoffs we're talking about concerns State taxes. Less than 40 percent of all taxpayers -- usually the more well-to-do -- use this writeoff. The majority use the short form and don't itemize; so you don't get advantage of that as a deduction. So, even for the people within the same State and within the same community, it is unfair. It is even more unjust for those who live, as you do, in low-tax States. Thanks to the responsible leadership of Governors like John Sununu and his predecessors, New Hampshire is, as I said, one of the low-tax States. So, in effect, the current system rewards rich States with big budgets and high taxes. You people who've been responsible and kept your budgets low don't receive an equal benefit, and that's no way to run a Federal tax system.

What we want is a tax system that encourages prudent management of resources, a system that rewards those who work by permitting them to keep more if they produce more. We want the ingenuity and creative talents of the American people channeled into beating the competition instead of focusing on beating the tax collector with schemes and maneuvers. We want a system that's good for the American family. We want a new tax system for all Americans, a fair share tax plan for everyone. So, we propose raising the standard deduction for the American family to $4,000 and nearly doubling the personal exemption to $2,000. The political establishment back in Washington says you don't care about these things. Well, I say the Washington establishment is out of touch with the American people. America wants tax reform, and America deserves tax reform, and if we stand together, America is going to get tax reform.

You know, one cannot come to this spot without remembering what New Hampshire has meant to America. The tranquility of your countryside, your lakes and forests, the majesty of your wooded hills and mountains gave birth to a new breed of people -- people respectful of God, fiercely independent, and unafraid to stand up and be counted. In 1976, and then again in 1980, I traveled through your beautiful State, speaking at city halls and school gymnasiums and town meeting halls. And if anyone doubts that democracy is alive and well, let them come to New Hampshire. ``Live free or die'' is more than a motto. It's more than a motto; it's a way of life that we're bound and determined to preserve. And you know something? I don't think you'd be unhappy if a lot more of the other 49 neighboring States would adopt that same motto and we'd adopt it in Washington.

The American Revolution that began here never died. It, too, started over unjust taxation. King George underestimated how much the people cared about this issue. Don't you think it's time for a second American revolution? And we'll win this one, too, together. We'll overhaul our tax structure. We'll continue building a society where people are free and opportunity is unlimited -- one nation under God, with liberty and justice for all.

And now, before I thank you for letting me be here today, I just have a little news note. There has been some information already that has leaked out about it. And I can tell the press that they're supposed to wait around because you're going to get a briefing from some others. I'm pleased to inform you, if you haven't heard, that Reverend Benjamin Weir, who was held hostage for 18 months in Lebanon, has now been released. I talked with Reverend Weir on Air Force One this morning. And I'm happy for him and his family. But I will not be satisfied and will not cease our efforts until all the hostages, the other six, are released.

The Vice President plans to meet with the families of the six remaining hostages on Friday, when they will be in Washington. And, as I said, a briefing for the press will occur here after I depart. But I want to tell you that, on the plane, knowing about this and knowing that we had him back in America, safe with his family, I wasn't going to say anything because we were going to make the announcement from Washington at 12:30 p.m. And then when I saw that someplace along the line some information had leaked and that I would be here until about 12:20 p.m., I thought, well, I'll just jump the gun on the fellows in Washington and tell you about it. So, we were trying to keep it so quiet because we don't want to do anything that endangers the chances of the other six.

But now, God bless you all, and thank you for letting me be with you here today. Thank you very much.

Note: The President spoke at noon outside the statehouse. He was introduced by Gov. John H. Sununu. Following his remarks, the President returned to Washington, DC.