FOR a growing number of American children, the budding promise of youth may be blighted by hunger, homelessness, and family instability.A new Census Bureau report shows that one out of every five children - and one of every four preschoolers - lives in poverty. In 1990 alone, the number of poor children grew by nearly 850,000. A comparable increase in 1991 would put the number of children in poverty at its highest level since 1965. These figures are shocking, embarrassing, and unacceptable. They are higher than those of seven other Western nations: Australia, Canada, West Germany, Norway, Sweden, England, and Switzerland. The census findings refute old stereotypes that child poverty primarily affects minorities, urban residents, and large families. As the Children's Defense Fund points out, poor white children outnumber poor black children. More poor children live outside cities than in them. And most poor families have just one or two children. The need to improve the economic well-being of the youngest Americans is often framed in pragmatic terms. If the nation fails to produce healthy, educated children today, the warning goes, it will lack a competitive work force tomorrow. But the argument of economic efficiency neglects the higher moral right of children to share a fair start at developing their full potential and individuality. The nearly forgotten phrase "peace dividend" is in the air once more. The White House is being cautious with it, but cutbacks in military expenditures are likely to accelerate in coming months and the budget agreement that has kept such savings from becoming increases in domestic spending is likely to be altered. How many children could be fed by the cost of one B-2 Stealth bomber? Such equations can remain pious dreams instead of translating into specific domestic programs. Now is the time to spell out the priorities the US should and must commit to when guns are exchanged for butter. Feeding its hungry children and preparing them for a productive life in school and beyond is surely one of them.