UNDERSTANDING THE RIOTS PART 5 : THE PATH TO RECOVERY : ECONOMIC RENEWAL : We Have the Vision to Get U.S. Moving

NEW YORK — We are traumatized by the riots, suddenly aware of the thin line that divides social accommodation from social conflict, made uneasy by an awareness that we are living in a period of truce by exhaustion, not peace by understanding. But we must think about such a peace.

Right now, there is no plan for getting back on the growth track, or for directing jobs or incomes to those who need them most. Washington is awash with proposals for tax relief, tax incentives, boosts to this or that industry. Some proposals will help out the economy, but they will not start up its stalled engines. The proposals are not big enough, not dynamic enough.

Is there a way of getting a move on? Here is a program that might do the trick:

* The creation of a dozen major research-and-development establishments, like the Institutes of Health, to help fund and coordinate path-breaking industrial ventures. Initial projects could be genetic engineering, ceramics and solar energy.

* A national apprenticeship program to train non-college-bound high school graduates for high-skilled employment. We are virtually the only advanced industrial nation without such a program.

* Coast-to-coast restoration of the nation’s decaying bridges, tunnels and roads, and modernization of its obsolete air-traffic-control system.

* A nationwide program to convert slum areas into neighborhoods by the construction of two-family housing projects--with playgrounds and schools.

* A project to link U.S. cities by bullet trains, starting immediately along the Atlantic and Pacific coasts.

We can argue about the merits of this or that proposal. But the point is clear. It is within our capability to dream up a program capable of dynamizing the nation, both economically and socially. Then why don’t we do it?

There are two reasons. First, it is a public investment program, not a private one. That is already two strikes against it. We have strong negative feelings about public investment, just as we have strong positive feelings about private investment--without looking into the merits of either. Suppose General Motors agreed to build the bullet trains, IBM to launch the research centers, an association of publishers to fund the apprenticeship program, the Bechtel Corp. to fix up the infrastructure, a consortium of hotel keepers to rehabilitate slums. Would we not feel differently about the program?

That brings us to the second reason. It would cost too much, probably more than $100 billion a year. We could only finance such an increase in federal spending by borrowing. Borrowing means increasing the deficit. That would be another step toward national bankruptcy.

But would it? Would we not applaud the $100 billion that private enterprise would borrow for the same program? Why should it impoverish a nation to borrow for purposes that will strengthen it, any more than a company?

There is no reason. A program of public investment, financed by borrowing, can move this country forward in the same way as a program of private investment. The difference is that we have it in our power to launch a public program now, when and where we need it. A publicly led boom will encourage private enterprise to take action sooner and more confidently.

We have used the government to dig the Panama Canal, to finance the transcontinental railways, to build the Manhattan Project, the National Highway and the Social Security systems. We can use it again to restore momentum to the economy, good permanent jobs in the private and public sectors to the unemployed and hope to the residents of the urban wasteland.