THE LATEST American argument over Nicaragua centers on the death of two American civilians who had joined anti-Sandinista insurgents and were killed in a clash with government forces inside Nicaragua. Nicaragua charges that the two were "CIA mercenaries," while the U.S. government and the group to which they belonged say they were (unpaid) anti-communist volunteers. Critics suggest that the administration is at the least coddling such volunteers and perhaps moving toward introducing American forces.

On the big question of whether American troops may eventually fight in Nicaragua or El Salvador, we see no possibility that this administration will take on a plainly antagonistic public or put down its own considerable internal resistance to the idea. It is a long way from the working-level solicitude shown, unwisely, to some private Americans who turn up in Central America. In fact, the reported private aid may reflect not an expansion of the official American presence but a contraction. Congress has rejected further funding of the "secret war" in Nicaragua after Sept. 30, and has kept Salvadorans guessing. Into the gap some private aid has flowed.

A more intriguing question is posed by the death of the men from "Civilian Military Assistance" in Nicaragua. Ask just what is wrong with what they did. American citizens are free to pursue their political beliefs in ways that do not violate American law. One thinks of Americans who fought in Spain's civil war in the 1930s, with Britain before America entered World War II, with Israel in its several wars. The Neutrality Act constrains what private citizens can do on home soil, and has been invoked against Civilian Military Assistance for some of its stateside activities. But the two who died were in Nicaragua. In fighting the Sandinistas, moreover, they were doing only what the U.S. government has done through its aid to Nicaraguan insurgents. The principal objection to them -- as to the U.S. government -- is political, not legal. We have argued against American sponsorship of those insurgents since the "secret war" became known.

Should there be a law? Earlier this year the administration proposed to make it a crime to aid foreign groups designated by the secretary of state as "terrorist." We thought it was a bad bill, putting excessive discretion into executive hands and unduly limiting the rights of citizens. In this case, this administration presumably would not have proscribed a group dedicated to its policy goals, but another administration might have. Better, we think, to leave citizens free to make their own choices about the foreign causes for which they wish to risk their lives.