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WHEN ADVOCATES OF a national missile defense system were forced to retreat last week in the face of soaring cost estimates, it was an embarrassment not only to Sen. Bob Dole's campaign but to the whole Star Wars enterprise.

The Congressional Budget Office, which is nonpartisan but controlled by the Republican majority, estimated that a defense of the continent against missile attack would cost somewhere between $31 billion and $60 billion.That was a blow to Dole and other advocates of the Defend America Act, which would mandate such a system but had projected a much lower cost.

Dole should have known better. He almost alone among the players in this debate was around in the 1970s when a "thin" population defense of North America was bounced out of Congress. It was withdrawn not because of protests by doves who saw it as destabilizing but by the "hawks" who immediately grasped the problem with it.

The problem wasn't and isn't money. Saving an entire American city from a nuclear strike would be worth a lot more than $60 billion.

But, the so-called Chinese defense would have bought essentially no protection for a stupendous sum of money. Sen. Henry Jackson, D-Wash., pulled the plug on that system.

Now, a quarter century has passed. Nearly $100 billion has been lavished on development of missile defense. Huge strides have been made in computing and radar capability. And the same problem remains with a system designed to stop an accidental launch or a relatively small missile attack by a developing nation like China.

The problem is that such a system for defense of the whole continent would require interception of missiles outside the atmosphere in the near-vacuum of space. In that environment, decoys like metallic balloons or clouds of metallic chaff make identification of the actual missile problematic if not impossible.

Above the atmosphere "objects of different weights and shapes travel at the same speed. This makes it possible to create a large number of false targets while adding only minimal weight to the payload of the missile," wrote four scientists of the Massachusetts Institute of Technology.

That means, explain the authors, that the defense must either launch an interceptor at every target or wait until the false targets are slowed by the atmosphere. Then, the missile would have passed below the interceptor's minimum intercept altitude.

In the end, the best defense is a good offense. U.S. forces, despite thousands of sorties, failed to destroy a single mobile Scud battery in the Perian Gulf War. It took an average 45 minutes between the time a mobile Scud launch was detected by satellite and the notification of air crews in the area. That response time has now been cut to four minutes.

Such improvements in counterforce capability may not be as glamorous and politically reassuring as shooting missiles out of the sky. But they are accomplished at a fraction of the cost and in the end will probably save a lot more lives than any number of Maginot lines in space.