It has happened here in America.  It has happened to you and to me.  Government exists to create and preserve conditions in which people can translate their ideas into practical reality.  In the best of times, much is lost in translation.  But we try.  Sometimes we have tried and failed.  Always we have had the best of intentions.

But in the recent past, we sometimes forgot the sound principles that guided us through most of our history.  We wanted to accomplish great things and solve age-old problems.  And we became overconfident of our abilities.  We tried to be a policeman abroad and the indulgent parent here at home.

We thought we could transform the country through massive national programs, but often the programs did not work.  Too often they only made things worse.  In our rush to accomplish great deeds quickly, we trampled on sound principles of restraint and endangered the rights of individuals.  We unbalanced our economic system by the huge and unprecedented growth of Federal expenditures and borrowing.  And we were not totally honest with ourselves about how much these programs would cost and how we would pay for them.  Finally, we shifted our emphasis from defense to domestic problems while our adversaries continued a massive buildup of arms.

The time has now come for a fundamentally different approach for a new realism that is true to the great principles upon which this Nation was founded.

We must introduce a new balance to our economy—­a balance that favors not only sound, active government but also a much more vigorous, healthy economy that can create new jobs and hold down prices.

We must introduce a new balance in the relationship between the individual and the government—­a balance that favors greater individual freedom and self-reliance.

We must strike a new balance in our system of federalism—­a balance that favors greater responsibility and freedom for the leaders of our State and local governments.

We must introduce a new balance between the spending on domestic programs and spending on defense—­a balance that ensures we will fully meet our obligation to the needy while also protecting our security in a world that is still hostile to freedom.

And in all that we do, we must be more honest with the American people, promising them no more than we can deliver and delivering all that we promise.

The genius of America has been its incredible ability to improve the lives of its citizens through a unique combination of governmental and free citizen activity.

History and experience tells us that moral progress cannot come in comfortable and in complacent times, but out of trial and out of confusion.  Tom Paine aroused the troubled Americans of 1776 to stand up to the times that try men’s souls because the harder the conflict, the more glorious the triumph.

Just a year ago I reported that the state of the Union was not good.  Tonight, I report that the state of our Union is better—­in many ways a lot better—­but still not good enough.