WHEN President Bush declared an end to the cold war, saying a Soviet invasion of Western Europe "is no longer a realistic threat," further cuts in defense spending became inevitable.I want to insure that middle-income American families - who got so little from the policies of the 1980s - get at least a share of this peace dividend. I propose a $300 tax credit for every child under age 19, which means a 25 percent reduction in the income taxes paid by a family of four making $35,000. It would be paid for by a small cut in defense spending that would leave the Pentagon budget for the next five years at 94 percent of what it was over the last five. In last year's budget negotiations we began to redress the excesses of the '80s with an $18 billion increase in the Earned Income Tax Credit for the poorest among us and a modest tax increase for those in the top income brackets. But the United States continues to ignore the desperate needs of middle-income families at its peril. A decade ago, American families trusted their futures to Reaganomics. Today they are suffering through what economist Wallace Peterson calls a "silent depression." Bombarded by the glitz of the Michael Milkens and Charles Keatings, many families sadly believe it was they who failed the system and not the system that failed them. Truth be known, trickle-down policies are rigged against families from the start. Two million high-paying American manufacturing jobs were exported to Asia in the 1980s. The top growth jobs in the '80s were janitor-cleaner, cashier, secretary, and food preparation worker - none paying enough to support a family. Two paychecks and depleted savings became a necessity of life for families. Soaring costs for health care, housing, autos, and college education made families feel even poorer. The typical family today pays $1,300 for health insurance - compared with $150 in 1980 - and gets less for its money, as deductibles and co-payments skyrocket. It's a recession when incomes fall, but it is a depression when home prices collapse as they did last year, causing a stunning $181 billion plunge in family net worth, the first such decline in two generations. The silent depression has other costs. America led the world in establishing the 40-hour work week, yet in the '80s falling wages forced Americans to work longer hours and take shorter vacations than people in any other major industrialized nation. The share of mothers working soared 50 percent, though many would rather have stayed with their children. According to a recent Yankelovich poll, 80 percent of working women would quit or reduce their hours if they could. One of the hidden costs imposed on families by Reaganomics is a decline in the amount of time with each other. Family leisure time fell 37 percent between 1973 and 1987; time with children fell 43 percent between 1965 and 1985. By 1989, teachers were pointing to the lack of parental involvement as the biggest problem confronting public schools. Perhaps the most devastating cost of the silent depression is despair for the future. America is a nation of immigrants driven by the hope that their children will prosper beyond their wildest dreams. That unique promise of a step up in life turned empty in the '80s. Today's generation of male high school graduates will be the first to do worse than their fathers. American families with children saw their taxes go up while their incomes were falling in the 1980s - by $1,600 on average after inflation. Lowering their taxes would also improve their prospects by boosting the economy. Expanding Individual Retirement Accounts (IRA), as I also propose, will give the economy an additional kick by immediately freeing up existing IRA savings for first home purchases. The cold war is behind us, but America faces many other challenges, ranging from reducing the deficit to increasing savings and investment. Work on these and other burning issues cannot move into high gear, though, until a genuine recovery begins, sturdy enough to lift the silent depression that has been weighing down American families for more than a decade now.