Yesterday morning, walking to work, I passed a woman standing on the streetcorner, eyes shut, talking loudly and rapidly to herself. Nothing odd about that, of course. Every morning as I walk to work I pass someone like her. If I leave the office for lunch, I pass another. If I walk through Farragut Square, I see more. And the same is true walking home in the evening.

I do not know how many of these people are actually homeless. I know, in fact, nothing about them, except how they appear to me as they wander mumbling, sometimes raving, occasionally even screaming through and into the streets. They appear not only truly needy but also truly mad. I avert my eyes. I pretend not to notice. I look the other way. I feel uncomfortable. Just like most everyone else. And most of us have been doing that for quite some time now. It may have hardened our hearts but it has not alleviated the problem -- or made it any less visible, unless we too clamp our eyelids tightly shut. Out of sight is out of mind, as they say.

Writing on this page Jan. 4, Charles Krauthammer suggested that the problem was the emptying of the mental institutions, which 20 years ago housed some half a million people and now house about a quarter of that number. Although there has been considerable progress over the last two decades in the chemical treatment of mental illness, the results have not been that dramatic. Many of those who would have been confined to instiTAKE 208809 PAGE 00002 TIME 10:18 DATE 01-15-85 tutions 20 years ago now live on the streets or in whatever temporary shelters they can find. They do not appear to be any the less mad, however, although they may not pose any immediate, direct threat to themselves or to passersby.

The solution, Dr. Krauthammer wrote, is to return them to -- "though no one dares speak its name" -- the asylum, "a place where the homeless mentally ill are taken and given food, shelter, hygiene and a sense of order in their lives." Dr. Krauthammer's solution provoked a considerable response, largely negative.

The very word "asylum," as applied to a shelter for the disturbed and the confused, for those who cannot cope with the world without help, conjures up images of Bedlam and other 19th-century horrors. It is curious that these asylums, considered socially progressive when they began, deteriorated into madhouses and snakepits, helpful, perhaps, to those of us who no longer had to confront the mentally ill on the street but not very helpful to their inmates. Dumping them on the street in the name of whatever abstract ideal of freedom and liberty is not very helpful, either, unless it makes us -- i.e., "society," the "community" -- confront the problem, now that it is no longer out of sight but back in our midst, in the midst of virtually every large city in the land.

"Every Wednesday and Friday for more than a year," the Jan. 7 issue of Newsweek reports, "a van from the Texas state psychiatric hospital at Austin cruised into downtown Houston, paused in front of the Greyhound bus station and dumped its cargo -- about a dozen mental patients just discharged from the hospital. A few on each trip had somebody waiting for them at the terminal. The rest were left with no money and nowhere to go -- just an appointment with a mental- health counselor in the next three months." The state could no longer afford to house them. Ex-convicts are treated better in Texas. They get $200 and a suit of clothes. Discharged mental patients get a ride to the bus station.

Leonard S. Rubenstein, a lawyer with the Mental Health Law Project, wrote last Saturday on The Post's Free-for-All page that "society's failure to provide alternatives to long- term hospitalization has made de-institutionalization a tragedy for many patients. In pqrt that failure reflects the lack of appreciation of the scope of services required to make de-institutionalization work." That is undoubtedly true. I myself do not know which is preferable, removing the mentally ill from the community and placing them in asylums, or providing asylum in the community. I do know that dumping them on the streets, to forage and fend for themselves as best they can, is intolerable and in the long run very costly -- an not in money alone. Money, of course, is not the only solution, but lack of money -- and lack of concern -- is certainly a large part of the problem.