Before he left home in Massachusetts, Jerome Grossman's friends kidded him about "going to the Junior Republican Convention" here.

It wasn't the kind of thing someone with impeccable liberal credentials like Grossman, an initiator fo the Vietnam Moratorium demonstration and a longtime Democratic Party activist, enjoyed hearing.

But events and circumstances have boxed in Grossman and much of the Democratic Party's liberal wing. Election defeats and the tenor of the times have turned against them, leaving them demoralized and divided.

Outnumbered and almost leaderless, they came to the party's midterm conference here unhappy with a Democratic president who now talks of cutting social programs and spending millions more on defense.

They left today without causing the embarrassment to President Carter that some of his aides had initially feared, or being dealt with as heavyhandedly as some of them had predicted.

What victories they won -- increasing to 50 percent the number of women at the 1980 party convention and a resolution calling for enactment of a national health insurance bill in the next Congress -- came through compromise, not confrontation.

"I feel positive about it all," said Rich Scott, chairman of Minnesota's Democrat-Farmer-labor Party. "What could have happened was a lot of up and down votes to teach the liberals a lesson.I have a feeling they could have taken a 'Let's blow you out of the water' attitude and done it."

But the essential question of the relationship of liberals to the Carter administration remained largely unresolved.

If Carter did little new to anger the liberals, he didn't completely win them over. "I get a funny feeling about how people in the party feel about Carter," said Jo W. Baer, a Democratic Natioal Committee member from New York. "He doesn't excite people. He's not in real trouble, but if the Republicans put up a good candidate he could be because he isn't exciting the activists in the party."

There was no serious talk of a dump-Carter movement among liberals at the midterm parley, the largest gathering of Democrats since the 1976 nominating convention. In part, it's because there's no real alternative. Whatever their problems with the president, most regard him as more liberal than he Democratic Congress.

"Who else is there? If it came down to Ierry Brown, or Jimmy Carter, I'dgo with Carter in a minute," says Grossman.

Sen. Edward M. Kennedy (D-Mass.), who has titillated liberals for a decade, brought the only real excitement to the three-day conference, proving in an electrifying speech that he still poses a challenge to the president in style and substance.

Kennedy told the liberals what they wanted to hear, bringing them to their feet cheering in a way Carter was never able to do.

But Grossman and other liberals feel strongly that Kennedy will never run for president. "The Kennedy thing is dreaming about the messiah, a dream that's never going to happen," he said today. "His presence, however, gives us a standard to measure Carter by. Kennedy shifts the whole political dialogue to the left. Kennedy sets a standard in the show business of politics which is very important. Jimmy Cater's oratorical style could make the 23rd Psalm sound banal."

Carter's relationship with party liberals has always been tenuous. He wasn't their first choice in 1976. And many of them didn't embrace him until he selected one of their own, then-Sen. Walter Mondale (D-Minn.), as vice president and agreed to a liberaloriented party platform.

Most of the liberal effort at the midterm conference was directed at pushing Carter into living up to that platform. But liberals could muster little of the same intensity that they have in other years. "The conservatives are more energized than the liberals," complained Grossman. "They have a clearer sense of purpose than we do all over the country. They have an agenda."

The leadership of the two chief liberal coalitions, the Democratic Conference and the Democratic Agenda, at the conference came from the party's left fringe. The only elected officeholder among their chief spokesmen was Rep. Donnald Fraser (D-Minn.), who gave up a safe House seat to run unsuccessfully for a Senate nomination.

"There is a certain crisis of liberal leadership," said Michael Harrington, one of the leaders of the Democratic Agenda. "We don't have any programs. We don't have the answers like we used to."

"It's a weird period for liberals," he added. "In many respects, this is the calm before the storm. The problem is the conventional liberal wisdom of the past doesn't work anymore. This is like 1931. Just as the conventional wisdom of the 1920s was totally shattered by the depression, the conventional wisdom of the 1960s has been shattered by inflation."

Nonetheless, the Democratic leadership moved behind the scenes to compromise differences with liberals on women's issues, farm policy, national health insurance, social programs and convention rules in an attempt to nullify dissent.

But the White House drew the line on a budget resolution, sponsored by United Auto Workers President Douglas Fraser, which called on Cater to spare domestic social programs from the budget cuts he is planing for next year.

And this issue provided the conference's only major floor debate, one liberals lost by a 3-to-2 ratio.

The compromises, most of which delegates didn't learn of until today, drew praise for Party Chairman John C. White from many who had complained earlier about the conferecne's restrictive agenda.

But there was a strong residue of bitterness over White House control over the procedings. "We've seen a lot of manipulation and last-minute compromise," said Wisconsin Party Chairman Michael Bleicher. "When you compromise at the last minute it makes a lot of people needlessly unhappy."