New Dominoes Are Domestic and Economic : If present trends continue, today’s young worker faces an 84% lifetime tax rate.

Bill Clinton finally showed real courage in regard to Vietnam. Admittedly, his decision to normalize diplomatic relations with our former foe didn’t require the physical bravery of the 3 million men of his generation who went to Indochina to fight in the 1960s and ‘70s, but Clinton has risked his political life in seeking to put the war behind us. Yet leaders will need even more personal fortitude to deal with the next great challenge: falling fiscal dominoes here at home.

Sen. Bob Smith (R-N.H.) will lead a powerful anti-normalization drive in the Congress. Smith is right; the Vietnamese have stonewalled the POW/MIA issue for the past two decades. Smith asserts that it’s not time that heals old wounds, but rather the truth. Yet for four decades, there has been scant truth associated with any aspect of our involvement. Few experts believe that America got an honest accounting of the 2,200 missing we left behind in Vietnam, but hardly anyone believes that any of those men are alive today. Bad things happen in war. And the American people--71%, according to a recent CNN poll--while honoring the memory of the 58,167 we lost, have concluded that the war was a mistake.

The geostrategists say that we can use Vietnam as a counterbalance to China, but the truth is that we have little leverage on Asia Inc. Americans have to get used to a new world that belongs less to the militarily brave than to the economically adept. Consider the example of Harry Wu. China arrested this naturalized American citizen on seemingly phony espionage charges, and the United States barely peeped in protest. Not so long ago, such a brazen act would have brought out big-stick gunboats. Today, House Speaker Newt Gingrich assures jittery worldwide financial markets that nothing Beijing does will get in the way of China’s Most Favored Nation trade status. After all, the United States will export $12 billion in goods and services to China this year, and that’s worth a quarter-million jobs for Americans. How dependent will we be on the Asia market in 25 years, when the Chinese economy is projected to be 40% larger than ours?

The Asian mega-economies of the future cannot destroy American prosperity. Only Americans can do that. Unfortunately, that’s where we’re headed. An article in the July 10 issue of Fortune has more to say about the fate of the American Dream than all the politicians’ volleying over Vietnam combined. If present fiscal trends continue, the lifetime tax rate confronting today’s young worker will be a pocketbook-emptying 84%. That’s the bad news. The good news is that if the Republican budget recently passed by the Congress is enacted and actually succeeds in balancing the budget by 2002, then that lifetime tax burden will fall--all the way down to 73%.

Most likely, we’ll never reach such prohibitive levels of taxation: the runaway train of entitlement spending will run off the rails first. Yet far preferable would be a careful Social Security reform that brakes the spending train and perhaps transfers some of this explosive actuarial cargo to a privatized IRA-type system. But the realization of such reform will take far more political courage than Clinton--or Gingrich--has heretofore displayed.

The poet T.S. Eliot predicted that our end will come not with a bang, but a whimper. More recently, the University of Maryland economist Mancur Olson found that many more civilizations have collapsed from slow decay than from abrupt defeat. His book, “The Rise and Decline of Nations,” offers the best single survey of threat to America in the 21st century. Olson’s point is that over time, special interests not only proliferate, but also accumulate--to the point that the arteries of commerce are hardened and the burden of government is crushing. And so we can look in the mirror and see our enemy. The American Assn. of Retired Persons is just one expression of our appetite for income-transfer--a fiscal gluttony that, Olson assures us, will be the death of the nation.

This year marks the 20th anniversary of the fall of Saigon; later this month, Clinton will dedicate the new Korean War memorial, commemorating another frustrating Asian ground war. The United States rightly remembers its gallant servicemen and women who fought for freedom in wars, won and lost. But now we face a new stern challenge: winning the long twilight struggle for domestic perestroika. With the trends running the wrong way, it will take real political courage on the home front to preserve America as a nation fit for heroes.