By every right, this should be the proverbial best of times. The hard business of government and the rancorous political debates are, for now, behind us. The Congress remains away, the news continues slow, the president enjoys his long vacation and the people obviously are pleased with him, a condition we haven't experienced in years.

For another welcome change, luck seems riding with us. Our military performs flawlessly. Our enemies blunder and miss, in the Mediterranean and Korean skies, and pay the price for their reckless stupidity. Our scientists demonstrate their extraordinary skill, even showing they're capable of fixing a stuck camera on a satellite circling Saturn -- and then head it on to photograph more distant planets.

After a generation of gloomy events, disasters and mishaps, we've hit a string of successes. Our hostages get home safely, our space shuttle lifts our spirits and rekindles our pride, our new leader displays exemplary political talents, and after so long a period of stalemated government our creaky old political system gives evidence of (impossible thought) really working.

And in this last week of August, even the weather adds to what should be a sense of unusual well-being. Instead of the normal suffocating heat and humidity that envelop Washington at this season, the capital luxuriates in bracing fall-like weather, the finest in memory for this time of year.

Yet despite all these happy omens, something else is stirring -- a nervousness, and what I can best describe as almost a palpable feeling of fear. All around us, it seems, are signs that many people think hard times are ahead.

The most visible sign comes from Wall Street, where the bears came out of their caves last week.

Economics was never my strong suit, even in graduate school where we grappled with the arguments about economic determinism and the way the world supposedly actually works. The economists spoke a different language, and I confess to never being persuaded that they really knew what they were talking about -- or that you could find two who agreed with each other.

Nor have I truly ever understood the stock markets, although in recent years I have come to know well, and admire, a number of leading people on "the street" who oversee literally billions in investments.

But for months now I've found myself fascinated by, and preoccupied with, the differing forecasts of the economists, the erratic behavior of the markets, and the indications of apprehension in the almost desperate ads taken out by competing banks and savings institutions. These all came together last week.


On Monday, I saw in The New York Times that the Emigrant Savings Bank in New York was advertising: "Get 20% interest 'up front,' in cash, at Emigrant now. . . and up to $2,000 tax-free interest starting Oct. 1."

That same day, same paper, Dime Savings Bank was advertising a "total yield" of 27.61 percent for investors and The Lincoln Bank was offering a 35 percent return, plus "up to a $500 cash bonus and $2,000 tax-free interest." Wild come-ons like these continued throughout the week, rising in intensity, and culminating Friday with Chase Manhattan Bank taking out two full pages to say "The Chase Will Pay You 40% Annual Rate Until Sept. 30. Then Up To $2,000 Tax Free Interest." To compound the confusion, it now appears that some of the offers might not pass muster with the Internal Revenue Service.

On Tuesday morning the papers were reporting that the stock market had plunged to its lowest level in a year, with gloomy forecasts of worse to come. And this after the great tax and budget victories of spring that were supposed to spur the economic revival. What's going on?

An analysis from Jean Kirk, of the respected Baltimore investment house of T. Rowe Price Associates Inc., later that day gave this interpretation:

"The realities of getting from here to there have finally caught up with the financial community. The Reagan economic program which is geared to getting this economy back on track is going to take some time and obvious pain in the short-term.. . . Mr. Reagan appears to be between the proverbial rock and a hard place. He must cut the budget to carry out his promise to balance it, yet at the same time it is very difficult to find places to cut. Social Security and other social services presumably could be cut further but this would undoubtedly create a political backlash.

"So Mr. Reagan is faced with cutting defense expenditures, something which he does not really want to do. But you can bet there are not going to be any significant cuts. . . . President Reagan has momentum going forward because up to now the general public has been strongly supportive of what he has been doing. When you sit back and analyze the situation, how much of this public support is going to stay in place with continued high interest rates? The public will finally wake up come October 1st to what has been cut out of the budget and they will then understand that they are going to have to pay more for a lot of things they have been taking for granted. These issues coming up in the fall don't lend themselves to a coalition approach. That is to say, you are not going to get the same coalition on Saudi arms sales that you had on the tax bill. Not the same coalition on the energy issues that you had on the budget."

That afternoon I got another expert reading from a friend in New York, a top executive with one of the world's largest financial institutions. Wall Street, he said, has a total disbelief in the Reagan budget claims. The administration is eroding its credibility by pretending the budget deficit figures aren't going to be significantly worse than they say.

"There isn't even a wait-and-see attitude," he said. "There's a we-don't-believe attitude."

By Friday, The Wall Street Journal, a paper I have come to find indispensable in these uncertain, to say nothing of volatile, economic times, was confirming my friend's assessment. Their lead article was headed: Credibility Gap Stocks' Drop Reflects Fear That Basic Flaws Mar Reagan's Program

With its usual felicitousness of phrase, the Journal reported:

"The stock and bond markets have been sinking like a stone dropped into the Potomac. The reason is a growing conviction that the Reaganite program is undermined by an inherent contradiction, say many economists all across the liberal-to-conservative economic spectrum."

What's more disquieting are the words of Jean Kirk.

"We are in the eye of the hurricane right now," she says. "None of the issues have yet been discussed." The issues include the Clean Air Act, farm bill, block grants, Social Security, abortion, school busing, school prayer, savings and loan legislation, defense.

I am left, and I'll bet you are, with a series of unanswered, gnawing questions and a string of conflicting cliches: we're in the best of times . . . or the lull between the storm . . . or hearing echoes of the Twenties . . . or about to experience the bright dawn of the golden new era. I can't even tell you if I think the bears are right. But I can hear them growling, and it scares hell out of me.