smith: now, the third question to governor reagan from william hilliard. mr. hilliard: yes. governor reagan, the decline of our cities has been hastened by the continual rise in crime, strained race relations, the fall in the quality of public education, persistence of abnormal poverty in a rich nation, and a decline in the services to the public. the signs seem to point toward a deterioration that could lead to the establishment of a permanent underclass in the cities. what, specifically, would you do in the next four years to reverse this trend? gov. reagan: i have been talking to a number of congressmen who have much the same idea that i have, and that is that in the inner city areas, that in cooperation with the local government and with the national government, and using tax incentives and with cooperating with the private sector, that we have development zones. let the local entity, the city, declare this particular area, based on the standards of the percentage of people on welfare, unemployed, and so forth in that area. and then, through tax incentives, induce the cr

the next question goes to governor reagan from william hilliard. mr. hilliard: governor reagan, wage earners in this country, especially the young, are supporting a social security system that continues to affect their income drastically. the system is fostering a struggle between the young and the old, and is drifting the country toward a polarization of these two groups. how much longer can the young wage earner expect to bear the ever-increasing burden of the social security system? mr. reagan: the social security system was based on a false premise, with regard to how fast the number of workers would increase and how fast the number of retirees would increase. it is actuarially out of balance, and this first became evident about 16 years ago, and some of us were voicing warnings then. now, it is trillions of dollars out of balance, and the only answer that has come so far is the biggest single tax increase in our nation's history, the payroll tax increase for social security which will only put a band-aid on this and postpone the day of reckoning b