PERSPECTIVE ON BOSNIA : The Wrong War at the Worst Time : Vietnam undermined our institutions and values. A Balkans war could destroy the American Dream.

Despite strong Congressional and popular opposition, American military involvement in Bosnia continues to expand incrementally. U.S. warplanes periodically attack Bosnian Serb positions. U.S. ships and planes are ferrying British and Dutch reinforcements to the region. Several hundred U.S. troops are deployed in Macedonia, and American military advisers are playing a “non-combat” role in Croatia.

In late June, nearly 100 American soldiers landed to help lay the groundwork for what could be a prolonged and violent withdrawal of United Nations peacekeepers. Up to 25,000 U.S. troops remain pledged to assist the operation once it begins--an issue rapidly coming to a head following the Serb capture of U.N.-defended Srebrenica.

Clearly, the best reason for the United States to stay completely out of the Bosnian conflicts--the America of 1995 is simply in no shape to risk a Vietnam-like debacle--has escaped the President and more ardent interventionists.

Think of the enormous strengths and assets President Lyndon Johnson could bring to bear on that conflict 30 years ago--at least in theory. Almost none is available to President Clinton today.

In 1965, the United States was the world’s No. 1 military power and, because of the Cold War, few Americans seriously questioned the need for a huge Pentagon budget or a uniformed military numbering 3 million.

As the world’s top economy as well, the United States could simultaneously finance this vast peacetime military establishment and a modest welfare state, provide much of the world’s credit and maintain nearly balanced budgets. And thanks to our international industrial and technological leadership, we could pay relatively unskilled production workers wages that brought them middle-class lifestyles.

Despite racial injustice, inadequate opportunities for women and large pockets of poverty, this relative economic power produced a society that by any realistic measure worked. Living standards rose for the great majority. Income was becoming more evenly distributed. Schools educated most children effectively. And although the reigning “middle class morality” stifled some artistic creativity and individual freedom, it also fostered stable families and communities.

In 1965, most Americans respected their institutions. Elected officials, bureaucrats, teachers, police officers and judges could function smoothly. Enjoying the modicum of trust and mutual respect that lubricates all successful collective endeavors, the system worked. Defeat by Asian peasants seemed inconceivable to this America. Yet three years later, the country was a shambles.

Inflation set in and budget discipline weakened. Big U.S. payments deficits threatened the dollar’s international role. Domestic reforms stalled. Campuses and inner cities became battlegrounds, and tensions mounted between generations, races and classes. Worse, a fatal credibility gap opened between government and citizen. And in many areas, the damage from Vietnam lingers.

Yet if failure in Vietnam wreaked such havoc on the America of 1965, think how failure in Bosnia could affect the America of 1995. True, the United States is the world’s only remaining superpower. But budget pressures have slashed military spending and our total current force of 1.5 million could be stretched dangerously thin by a 25,000-man rescue operation--not to mention the multi-year, 300,000-troop deployment the Pentagon estimates would be needed to truly pacify Bosnia.

Economically, America is struggling to remain first among equals. Massive federal deficits affect new foreign or domestic initiatives and core government functions as well. Pre-Bosnia America is already the world’s greatest net debtor. The dollar is at 40-year lows versus the Japanese yen and the German mark. For most American workers, wages and living standards have been stagnant for more than 20 years. And the rich-poor gap has been widening rapidly for more than a decade.

Partly due to this economic weakness and partly due to an excessive counterculture-spawned backlash against middle class morality, American society is more troubled than in 1965. Families are under often fatal pressures. Schools can barely transmit essential knowledge, much less substitute for dysfunctional homes as incubators of discipline and sound values.

A tendency to fix failed of distrusted institutions by micromanaging them into paralysis has crippled our schools and courts and warped much of our health care system. And all of these problems are aggravated by new media outlets that sensationalize and confuse the choices we face. Even a war with clearcut enemies and vital stakes could tax 1995 America to the limits.

A quick success in Bosnia might serve U.S. interests by enhancing NATO’s credibility, maintaining alliance unity and marginally bolstering European stability--at least until the next ethnic war. But failure or even a costly success could mortally wound our fragile, fractious polity--and finish the job Vietnam started of destroying the American Dream.