"Our mood is upbeat, but we're worried"

-- headline in USA Today, Jan. 25, 1988

Call it the vision gap. As the 1988 election process formally starts in Iowa, no candidate has hit upon a message that gives hope for progress -- a tomorrow better than today. It's dispiriting, but don't blame the candidates. They've had their ideas. But their proposals seem either hardheaded and uninspiring or starry-eyed and unbelievable. We've become a nation of demanding skeptics.

No candidate can easily satisfy our conflicting expectations. We're suspicious of ambitious new government schemes for social improvement. We doubt their effectiveness and fear their costs. But we also reject those who would shrink government -- who seem indifferent toward the disadvantaged or pessimistic about the future.

Our muddled mood is reflected in the headline from USA Today. Prosperity has bred contentment -- but not enough to overcome a sense of drift. Asked whether they're better off than seven years ago, 53 percent of Americans say "yes," according to the USA Today/CNN poll behind the headline. Only 17 percent say they're worse off. Most Americans also expect their personal fortunes to improve. But in the future, more Americans (41 vs. 37 percent) think today's children will fare worse than their parents.

Conventional wisdom blames the huge federal deficits for our unease. This is a half-truth. The deficits are a symptom of our confusion, not the source. Closing them will require tax increases and spending cuts that won't make anyone much happier. Nevertheless, the willingness of presidential candidates to specify which taxes they would raise or which programs they would cut is taken as evidence of political courage. This, too, is misleading.

The next president will almost certainly attack the deficits quickly -- no matter who wins or how vague he's been. The reasons are plain: 1) only at the start of his term can he easily blame the deficits on Reagan; 2) difficult decisions are best taken at the point most distant from the next election, and 3) failure to act would be worse than acting, because it would show the president lacked "leadership."

Something less tangible than deficits assails the national spirit. We've lost a sense of control over the future. From World War II until the early 1970s, Americans had a crude formula for progress. Government and business existed in partnership. Business would raise living standards through new technologies, greater efficiency and better products. Government would correct capitalism's shortcomings. It would help the disadvantaged, control the business cycle and provide needed services undersupplied by private markets.

No one announced the formula. It was just the way people thought and acted. Government's role in this mixed economy wasn't especially precise, because it didn't have to be. The formula seemed to work. In a new book -- "Dollars and Dreams: The Changing American Income Distribution" -- economist Frank Levy of the University of Maryland recalls just how well:

Between the late 1940s and late 1960s, median family incomes (adjusted for inflation) roughly doubled. In general, the increase didn't reflect two-earner families. Typically, World War II veterans had also doubled their incomes over the same period.

Living standards improved dramatically. In the mid-1940s, one-third of the nation's homes had no running water, two-fifths had no flush toilets, three-fifths had no central heating and four-fifths were heated by coal or wood.

Retirement -- once a privilege -- became routine. In the late 1940s, about half of all men over 65 still worked, while a quarter of the elderly lived with their children. Social Security meant the elderly could be independent as well as retired.

Regional poverty dropped sharply. In the mid-1940s average incomes in the South were about two-thirds of the national average. By 1970 southern incomes had risen to four-fifths of the national average.

Americans marveled. This was progress. It was relentless, automatic. We might have problems -- Vietnam, disaffected youth -- but we had mastered the trick of sound economic growth. And then it unraveled. Inflation and recession in the 1970s and 1980s dispelled the faith that government had subdued the business cycle. Government social programs hadn't eliminated poverty. American business wasn't magical. The rise in living standards slowed to a creep. Foreign competitors began to win.

We are now creatures of these contrasting experiences, and we haven't resolved the contradictions. We distrust government but expect much of it. We want it to guarantee a healthy economy while protecting us against any unpleasant disruptions. We want the 1960s restored without quite believing it can be done. This is the stalemate of the Reagan era: We still haven't forged a new consensus about the practical limits of government's social economic powers.

The candidates are stuck with this dubious legacy. They flail about, seeking a slogan or some set of programs that will rise above the dilemma. They strive to respond to our mood: a yearning for change without any widespread agreement on what the changes should be. It's tough. Because we harbor unrealistic and contradictory expectations, we find it difficult to focus on less-sweeping proposals that might be desirable and possible.

This political void is more apparent now than ever. Recent elections have been referendums on the incumbent administration. In 1976 Jimmy Carter ran against Watergate. Reagan campaigned against Carter's record in 1980 and in favor of his own in 1984. But this year is different. Because the Reagan years have generally been prosperous, people aren't so mad that they'll automatically vote Democratic. And yet, Reagan's greatest triumph -- the squashing of inflation -- is sufficiently distant that his record will only modestly help the Republicans.

We're left with a campaign that, for all its activity, seems empty. The Democrats don't have much to run against. And the Republicans don't have much to run for.