America seems inundated these day by waves of economic pessimism bordering on panic. With rare exceptions, the media do not seem to be doing their job of providing balance and perspective. Story after story recites falling economic indicators from financial markets to production, sales and jobs along with rising oil prices, inflation and deficits. Typical TV coverage shows an average consumer putting off his big ticket purchase, causing a retailer to reduce stock and a manufacturer to fire people. Come on! Have we forgotten what FDR said about fear itself -- and all the safeguards put in place since he said it?

The "hard" news is backgrounded against doomsday commentary on the S&L scandals, bank troubles, the federal deficit -- and of course, the Gulf crisis. Oil prices are seen rising endlessly.

It's time someone said, "Hey, wait just a minute." Yes, we are in for flat growth for a few quarters, and some regions and sectors are already in recession. Yes, inflation will have an oil surge; and yes, there are Gulf conflict uncertainties.

But: net oil shortages should be only 2-plus million barrels a day out of 55 million formerly produced (outside the U.S.S.R.) or about 5 percent. There is no gross supply-demand imbalance warranting even the price increases to date. What has happened is a dislocation of refined products, which time will correct, and a combination of panic, greed, speculation, hoarding and price gouging, for which peoples and governments are not without remedies.

As to war, if one comes, it will pit the fanatic leadership of one small country (18 million people and a $50 billion GNP, or the size of California, the population of Texas and the economy of Louisiana) against the entire world and specifically the five nuclear powers in the U.N. Security Council, plus a number of Arab neighbors. The allies would quickly have total air and naval dominance, plus the ability to isolate Iraq's armor. However bloody the conflict, it would be one-sided and relatively short. Most important, for the first time in 40 years, there is no danger of escalation to a superpower confrontation. Iraq has only limited ability to destroy other Gulf oil production, and that could be restored, with interim shortages filled from strategic reserves.

Even with a "diplomatic solution" that leaves Iraq intact, it will have to urgently resume oil exports, lowering prices. We must remember that oil prices surged 400 percent in 1973 and another 300 percent in 1980-81, reaching more than $40 a barrel -- and then fell abruptly to under half that as non-OPEC production peaked. The 1973 and 1981 oil shocks sent the world economy into a tailspin; but compared with the current 50 to 75 percent increases, they involved a 1,200 percent rise in energy costs.

The United States does need to shake out some of the speculative excesses of the '80s -- and we are. We do need to curb the deficit -- and we are trying. We should have an energy policy -- and with higher prices we might finally get one! America's economic body is basically healthy; it just has a bad cold with local aches and pains; and it will recover -- unless our fearful forecasters manage to turn it into double pneumonia!

The writer is president of the International Economic Studies Institute and a former Defense Department official.