WASHINGTON'S JUBILATION over Chancellor Helmut Kohl's election victory reflects a basic misunderstanding of what troubles Germany. Yes, the West Germans have reaffirmed their basic conservatism. Yes, the election results suggest that Germans want a new period of stability. But there are important economic, social and political reasons why instability may be in Germany's future, no matter what the wishes of Kohl or the voters who elected him.

Kohl's impressive victory followed a political campaign that actually disguised the country's real difficulties. The serious problems before Germany cannot be obfuscated by campaign mudslinging, sloganeering or attempts to blame national failures on Eastern neighbors or Atlantic friends. The fair weather period of West German democracy is over. Now Germany faces:

* A welfare state that the country can no longer afford but which no one wishes to dismantle.

* A demographic dilemma -- a wave of young people entering housing and job markets just as both are collapsing.

* Millions of foreign workers originally imported for jobs that are now disappearing.

* An increasingly antiquated structure of basic industries that are decreasingly competitive in world markets.

* The loss of technical advantages in industrial innovation, scientific research and development.

* The highest per capita imports of food and energy of any major industrialized country.

* A security policy which remains a source of considerable insecurity for a majority of Germans.

Germans created what was in many ways the Mercedes-Benz of welfare states -- comfortable, but overpriced. West Germany has outspent its legendary productivity. The pension security program, a source of pride for German governments for generations, faces near bankruptcy. Student loans extended to a growing number of German youth will be curtailed. Reductions in unemployment compensation and the erosion of social services and public utilities are probably unavoidable in the current fiscal crisis, but they will all be unpopular.

The roots of West Germany's little-noted demographic dilemma date back to the heady days of the economic miracle. By the mid- 1950s, the Germans had rebuilt their war- shattered economy, stabilized nascent democratic institutions and recovered much of their sovereignty. People seemed to be satisfied and confident in the future. Not surprisingly, beginning in the late '50s, the birth rate rose strongly, producing a peak of more than a million births in 1964. Births remained at a very high level until -- under the influence of what Germans refer to as the "anti-baby" pill -- they began a rapid decline in 1968. Most of today's Germans were born after the war.

Today German society faces a generation gap of Grand Canyon proportions. Nearly a fourth of the young people who voted last week backed the neutralist Greens, and more than a third voted for an SPD that was actively courting Green supporters.

The generation gap is not merely a question of attitudes, but of serious social and economic dislocation caused by the sudden increase in the population beginning in the late '50s. Ex-boom babies (that is, today's young people) now clog universities and vocational schools, unemployment roles and the housing market. This bulging group of young people, reared in prsperity, now faces an era of austerity.

Even during the prosperous years before 1975, when the world stood in awe of the German economy, there was no significant increase in the total number of jobs in the Federal Republic. In other words, much of the miracle was built on increasing productivity, not on growth that created new employment opportunities. This anomaly has only sharpened the effects of the current recession, in which unemployment threatens to reach dangerous levels. The German welfare state can cope with people on the fringes of society, but when the mainstream cannot find work, the German safety net offers no safety.

The young people forced to endure the consequences of too much preparation for too few opportunities are, not surprsingly, prone to deep frustration. Especially in the cities, young people provided the votes that put the Green Party into parliament for the first time.

Recent studies suggest that the Greens' youthful supporters were better educated but more often unemployed than other young people. The percentage of them living on government scholarship support or welfare was double the average for their age group. And they tend to come from wealthier families and to have no religious affiliation.

During the period when the German economy was developing like a school of sharks in a feeding frenzy, no one noticed that the import of cheap foreign labor had transformed West Germany into a multi-ethnic society. Today 7.6 percent of the population and 8.4 percent of the labor force are non-German. (For the most part, these foreigners took low- paying jobs in the industrial sector, while many Germans fled to government employment, which was the real growth area of the German economy during the last 15 years.)

Unemployment among foreign workers is well over twice the national level. Turkish immigrants have proven particularly difficult to integrate. Chilling expressions of hostility have surfaced such as the following widely circulated "joke":

"Q: What's the difference between a Jew and a Turk?

A: The Jews already have it behind them."

Certainly such xenophobia is not typical of edcuated Germans of any political persuasion. However, such attitudes are not rare among lower class, often unemployed, German youth. Many conservative Germans harbor the illusion that foreign workers can be lured (or nudged) into repatriation. Actually, West Germany faces the painful adjustments of a modern multi-ethnic democracy -- the extension of political and social enfranchisement to its minorities.

Germans are the primary industrial exporters to declining markets, and of products that are now more efficiently manufactured in developping countries. The German steel, automobile, and chemical industries, all sources of earlier prosperity, face structural crises for which no solutions are readily visible.

Germany seems undecided about whether it wishes to compete with the United States and Japan in high technology areas of future economic growth, or, whether it wants to compete with low wage, industirializing countries in more traditional manufacturing sectors. Most Germans reject the Green's exhortations against industrial society and their celebration of economic stagnation, but ironicallly, the economic policies of both the center-left and center-right coalition governments have acheived that "no-growth" economy.

The German reputation for technological wizardry contrasts sharply with recent realities. Although Germany has spent billions on research and development (it ranks third behind Japan and the United States), its performance in the application of peak technologies has been remarkably anemic. The Germans are forced to import an increasing amount of cutting-edge technology from the United States and Japan, and now have a large trade deficit in high-tech products with those countries.

At the opposite end of the economic spectrum, West Germany remains heavily dependent on imported resources, particularly for energy and food. West Germans profess dislike for "American exploitation of Latin American peasants," but they appreciate the low price of Central American bananas.

The election clearly turned on economic issues. More than 50 percent of the voters in pre-election surveys and exit polls indicated that unemployment, pension security, budget deficits and inflation were the most important problems facing the country.

To interpret Kohl's victory, as some in Washington have, as a mandate for the stationing of intermediate range unclear missiles is nonsense. A decisive margin of Kohl's supoporters voted for him despite his position on the missiles, not because of it. (According to exit polls, only 14 percent of German voters said foreign policy issues had influenced their vote last Sunday.)

Most Germans oppose deployment of the new missiles, irrespective of party affiliation, and many feel that the misiles would increase the threat of war, not secure the peace that strategic policies of "extended deterence" were designed to achieve. Moreover, a sizable minority in parliament rejects U. S. missiles at all costs. In fact, there has not been such widespread skepticism in the German parliament about the NATO alliance since the social democrats officially embraced it in the late fifties.

No European politician has a greater interest in negotiating an arms agreement that could head off missile deployment than Helmut Kohl. He could use concessions from his American friends to defuse the major issue uniting his parliamentary opposition and to consolidate his own leadership.

Anyone who views Kohl as a willing American flunky is deluding himself both about German public opinion and Kohl's political acumen. This is is the same chancellor who confronted American demands concerning the Soviet gas pipeline and won. A similar success on the missile issue could broaden his popularity beyond a "majority of the middle." Any peace advocate would have to apprieciate a German chancellor who reduced the possibility of nuclear war, even if his name is Helmut Kohl. Rarely has a new world leader had such an opportunity for statesmanship.

The very economic issues that were decisive in the election were not persuasively addressed by the Greens, which explains a good deal of the party's headlong rush toward obscurity in recent weeks. During the course of the campaign, the Greens lost over a third of their initial support.

The real importance of the Greens in this campaign was the disproportionate influence they had on the formulation of policy and campaign strategy within the SPD. Leading social democrats' efforts to portray themselves as closet Greens proved disastrous. The SPD was the big loser in the election, and now faces firmly ensconced political competitors on the right and left in parliament. Nearly 2 million SPD voters turned to the CDU last week. Traditional SPD voters in industrial areas like the Ruhr and in major cities shifted massively to the conservatives. It is unclear how the SPD will react to the discovery that it cannot fly by flapping only its left wing.

Many social institutions in Germany appear under considerable strain both from past experiments at social reform and from the hard edge of growing economic austerity. Conservative politicians would like to restore traditional values, but it is unclear how they would accomplish that goal.

The educational system, any country's primary investment in its future, is symbolic of the institutional challenge to be faced. Extended and reformed during prosperous years, the educational system has proven more successful as a provider of sterile guardianship over the nation's youth than as a force to integrate them into a productive economy.

West German educational reformers had over ten years to make their conceptions work. While they insisted that the expansion of education should not be narrowly subordinated to economic requirements, the process of scientific research and development lagged, and the ability of educated Germans to satisfy the kill demands of the marketplace deteriorated.

Prosperity permitted the inadequacies of the educational system to be covered up by giving university graduates cozy government sinecures: In 1974-75, for example, 85 percent of the graduates were given public service jobs. Such largesse is unthinkable in the current economic climate.

The rise of West Germany from the ashes of the Third Reich is one of history's great success stories. The party of protracted prosperity was fun while it lasted, but it now seems to be over. The West Germans will have to find their phl's supolace in a rapidly changing world.

These unresolved social and economic issues must be worked out internally. This can be done. Despite all the problems, West German democracy may prove more mature than pessimists fear.

Ironically, though, the United States can disrupt the process if it pushes too hard and too fast for the deployment of new missiles that many Germans don't want. The new Kohl government has a full plate of important domestic issues; if they are pushed aside by a great battle over missile deployments, the strains inside West Germany will only grow. A new generation of nuclear missiles in Germany makes sense only if it is acceptable to a new generation of Germans.

A perception of social and economic progress has historically been the real cement of the German-American partnership. Restoring a sense of progress in Germany is the most important task now facing Helmut Kohl and his colleagues. If German well-being is not restored, no amount of new missiles will compensate for that failure.