On the rare day here when you can't see the forest (or even the trees) for the fog, the setting is very nearly perfect for dismal contemplation of Reaganomics, national insolvency and the potentially devastating effect that both could have on American foreign policy.

By chance, two exceedingly insightful working papers were conveniently at hand. One was an essay by David Boaz, vice president of a think tank called the Cato Institute. Boaz stipulates the sanctity of defense spending in Ronald Reagan's scheme of things, cuts through all easy answers to the question of domestic economizing, and states boldly what it would mean to eliminate budget deficits in coming years. It would pretty nearly wipe out a large part of federal government activity and bite deeply into Social Security.

The Boaz essay is reductio ad absurdum, practiced presumably for its shock effect.

For the full shock effect, however, you have to read a second paper by a Cato stablemate, Earl C. Ravenal, a professor of international relations at the Georgetown University School of Foreign Service. Ravenal comes at the problem from exactly the opposite direction. Whereas Boaz shows how to save $209 billion without touching the Pentagon, Ravenal acknowledges the unfeasibility of Draconian assaults on government civilian services and fixed outlays. He would find $204 billion in economies in what he considers "the most egregious" feature of the Reagan 1983 budget: "the vast increase in defense spending."

What would be involved, Ravenal argues, would be a revolutionary reappraisal of the American role in the world, of U.S. obligations to allies, of the very definition of what is required for our security.

Right there lies the strength of Ravenal's argument. You do not have to accept the prescription (whether it's called neo-isolationism, global disengagement, Fortress America, or whatever) to be impressed by its honesty. He does not kid us with the promise of substantial savings by "eliminating waste." He does not play around with priorities on individual weapons systems, cutting out this new tank or that new aircraft.

Whatever the merits of a nuclear freeze, Ravenal does not include budget savings as one of them. The "bad" weapons are not necessarily the most expensive ones.

On the contrary, the more popular "conventional" forces -- the land divisions, tactical air wings, and Navy units -- account for nearly 80 percent of the defense budget. But they also constitute the essential underpinning of any ambitious, all-encompassing global policy designed to contain or deter Soviet expansionism worldwide. "The argument is simple," says Ravenal. "The defense budget is the price of foreign policy, and we can't afford our foreign policy."

So where do we retrench? Here again, Ravenal (like Boaz) is not one to play games. He rejects the selective abandonment of marginal commitments: "To be serious about cutting defense spending you must talk about America's major alliances -- particularly NATO, which is costing us $129 billion a year, half of our entire defense budget."

So Ravenal would switch, in breathtaking fashion, from today's policies of "deterrence and alliance" to what he calls "war-avoidance and self-reliance." He would shy away from involvement and intervention. He would take what some would consider to be frightening risks. For example, he is quite persuaded that any serious U.S. effort to defend the Persian Gulf would cost as much as its loss -- which is to say the loss of its oil. To a large extent, he would let Europe shift for itself.

Boaz argues that any effort to find the necessary deficit-ending economies on the domestic side would transform American society, radically and unacceptably. Ravenal says that in the interest of American solvency -- and security -- this will inevitably oblige those who would balance the budget to turn their attention to the Pentagon. But he is also saying something more: that it is downright disingenuous to think that you can balance the budget by defense retrenchment without matching retrenchments in foreign policy objectives as well.