THERE IS a growing unreality to the U.S. government's approach to North Korea that gives inconsistency a bad name and could lead to a major disaster. As a desperate regime in Pyongyang alternately rattles its sabre and tin cup, the White House has coughed up $8 million in emergency food shipments. The food continues a trend that, amazingly, makes the "rogue state" of North Korea one of the largest U.S. aid recipients in Asia, even as the United States maintains an economic embargo against it. Meanwhile, Congress last week voted to cut some of that aid -- in this case fuel oil that was promised as part of the delicate 1994 deal to get North Korea to shut down its known nuclear weapons program.

These contradictory pushes and pulls make clear that there is no coherent policy among officials in Washington, Seoul and Tokyo with regard to North Korea. Does the U.S. government and its allies want to acquire the North as a basket-case client indefinitely, or do we want to hasten its demise and risk unpredictable consequences? Or coax it to reform its economy and eventually reunify with the South?

The U.S. government's inability to decide what it wants and how it wants to get there has created an ironic situation where it is the needy North that is nonetheless controlling events, alternately proffering carrots and brandishing sticks to get what it wants.

Obviously, there is a case for -- and a noble American tradition of -- providing humanitarian aid. In addition, as its supporters argue, the food aid may also help persuade Pyongyang to join peace talks proposed last April by President Clinton and South Korean President Kim Young Sam. Opponents charge that such aid is rewarding an enemy with unilateral concessions and ask if Pyongyang's military food stockpiles have really been exhausted. Both have a point, but unfortunately, all miss the larger problem: The food crisis is just one symptom of a failing state seeking to be put on life-support even as it maintains a menacing military force across the Demilitarized Zone, just across the way from the outskirts of Seoul.

Neither Washington nor Seoul appears braced for the inevitable endgame. Not that they haven't been warned: The commander of U.S. forces in Korea, Gen. Gary Luck, told a congressional hearing in mid-March that "the question is not will this country disintegrate, but how will it disintegrate, by implosion or explosion." With upwards of 150,000 American citizens in South Korea on any given day, this is hardly an academic question.

The problem is that the Clinton administration is following a policy that didn't factor this outcome into consideration. U.S. policy is guided by the October 1994 accord with North Korea to freeze and eventually dismantle its nuclear weapons program in exchange for two light water civilian nuclear reactors and other blandishments. At the time the administration argued that the so-called "Agreed Framework" was itself a strategy for solving the broader Korea problem. The accord optimistically aimed at engineering a "soft landing" and a gradual, peaceful process of Korean reunification. The assumption was that North Korea would trade its nuclear weapons program for a package of economic goodies to revive its moribund economy -- and that it open its economy, as China and Vietnam, have done to generate economic growth.

But now, six years after the Bush administration began the diplomatic process and 20 months after the nuclear deal was negotiated by the Clinton administration, it is increasingly clear that the rulers of the most closed society on earth are terrified of the political consequences of opening up their system to foreign influences. Despite six consecutive years of negative economic growth since Moscow cut off its subsidies, Pyongyang has only tinkered at the edges with economic opening. Even without last fall's horrendous floods which devastated an already troubled agricultural sector, North Korea's economy has been slowly grinding to a halt. The problems Pyongyang faces are profound, structural and long term. They require radical, market-oriented solutions and sustained aid, trade and investment from the international community to turn the situation around.

Rather than swallowing their bitter reform pill, North Korea's skillful diplomats have pursued a deft approach with befuddled Washington and Seoul policymakers. Its military maneuvers send a dark signal of blackmail: If you don't start giving us food and money, we may do something nasty. Then there have been glimmers of a new willingness to test the price of cooperation. For instance, last month they made a deal to return the remains of American MIA's and to allow U.S. military personnel to search for other remains. And after six years of haranguing, they agreed to talks aimed at halting their missile exports.

Pyongyang's inability to reform suggests a long-term solution in which a revived North Korea gradually integrates with the South is highly unlikely. The most that any bail-out can hope to effect would be a kind of indeterminate muddling through -- with all the continuing dangers that entails -- or a graceful surrender.

Should we care if they collapse or not? The problem is that North Korea may not "go gentle into that good night." Fearing a collapse, and absorption by a South Korea seeking retribution against Pyongyang's elite, would North Korea lash out militarily in suicidal desperation? This is the policy dilemma.

Yet the other side of the dilemma is that if the United States chooses to put them on life support, it may still face the continued possibility that a North Korea may be covertly developing nuclear weapons as its ultimate insurance policy. And even if this nightmare is not the case, it still leaves a country with a million-strong armed force, bristling with Scud missiles and perhaps chemical weapons deployed within range of Seoul and 37,000 American troops.

The Clinton administration's response to what must be described as the No.1 security threat in East Asia has been to feel North Korea's pain and propose a meeting. The administration wants four-party talks (U.S., China, North and South Korea). This is a substance-free or what might be termed a "Woody Allen" policy ("90 percent of life is just showing up"). When asked what the purpose of the talks might be, administration officials are at a loss to define an agenda beyond the virtue of starting a diplomatic exercise. Some suggest a peace treaty. But what is the point of a peace treaty if the military standoff remains unabated?

Whether the issue is food aid, the armistice or four-party talks, the point is that the United States and its ally in Seoul need to reach consensus on the core questions facing the future of the peninsula. At the moment, Washington and Seoul seem to want it both ways. Some in Seoul want to squeeze North Korea until it bursts, while others want a conciliatory "soft landing." The United States treats North Korea as both a rogue state and a partner in non-proliferation. It is as if we are following Yogi Berra's advice: "When you get to the fork in the road, take it." There's a case for bringing down the North, and a case for putting it on life support. But you can't do both.

The time is long overdue for a basic policy choice. Of all the major actors, only the North Korean regime appears to have a clear sense of what it wants: survival. Before firmly pursuing either path, we must be clear about both the risks and the benefits. Obviously, the best outcome would be for North Korea to quietly disappear. Unfortunately, this is unlikely, and would be out of character given Korean history and culture. So if we choose to simply let them rot, it must be a decision based on a willingness to risk a military conflict, one that the United States and South Korea would win, but at a very steep price in human life (tens of thousands dead) and major physical destruction to Seoul.

Food aid can and should be addressed as a humanitarian issue (provided distribution is fully monitored from port to village) on an emergency basis. But how far should the United States and the international community go down this course given the depth of North Korean economic needs? What about the 1997 food crisis already building?

The paramount aim of the United States, South Korea and Japan is a reduction of the North Korean military threat. To the extent possible, there is also an interest in encouraging market-oriented reform in the North. There is a good case for generosity if such results are obtained. This entails a phased, step-by-step confidence building process.

What is required is a high-level presidential envoy to clarify to Pyongyang a kind of political "road map": What economic, political and security goodies (e.g. lifting the trade embargo, normalized diplomatic ties) it can expect, and what reciprocal steps it must take in order for North Korea to receive such benefits.

In the initial phase, Pyongyang would verifiably scrap its missiles and chemical and biological weapons, adhere to international norms, establish a hotline channel with the South and allow scrutiny of its military forces. Either as part of renewed North-South reconciliation talks or the four-party talks, a process of major conventional force reduction talks should be initiated as a precondition for a peace treaty. The response to such steps could be an easing of the U.S. trade embargo, more South Korean investment, some Japanese economic assistance and the creation of a Korean reconstruction window at the World Bank or Asian Development Bank. Agricultural aid should be offered as an incentive for serious market-oriented agricultural reform.

Later phases would include international verification of Pyongyang's past nuclear activities, implementation of North-South reconciliation accords in the social, cultural and economic spheres as well as mutual agreement to reduce the nearly 2 million men which collectively the North and South have under arms.

Whether modeled on the above suggestions or not, there is an urgency for a thoughtfully designed reciprocal framework, one developed in a bipartisan manner, to be put forward by the United States and South Korea. If not, there may be an October surprise that neither presidential candidate anticipated as an increasingly desperate North Korea gropes for solutions with the one device that always gets attention -- military threats. Robert Manning, former State Department advisor for Asia policy (1989-93), is a senior fellow at the Progressive Policy Institute. James Przystup, former member of the policy planning staffs of the State and Defense departments (1986-94), is director of Asian Studies at the Heritage Foundation.