The Cold War is apparently over. With astounding speed, hard-line Communist governments of Eastern Europe have fallen, toppled by their own peoples' demands for freedom and democracy. True, the hostilities that divided East and West for the past four decades will not disappear overnight, and the United States and the Soviet Union still have many differences between them. But by late last year many defense experts, including Robert S. McNamara, Secretary of Defense in the Kennedy and Johnson administrations, and Lawrence Korb, an Assistant Secretary of Defense under Ronald Reagan, told Congress that the U.S. may be able to cut its enormous $100 billion annual defense spending in half by the end of the century.

Such cheerful projections have increased hopes for a massive "peace dividend," a grandscale beating of swords into plowshares. The options seem endless—for instance, $25 billion saved from the military budget would amount to enough money to provide homes for the estimated 2.5 million American homeless. Still, the debate—on where to spend the money, or even if defense spending should be slashed—seems likely to go on for years. Pentagon watchers caution that breathless prophecies of quickly halving the military budget are unrealistic. Most analysts are calling for cuts of only 5 to 6 percent next year, and Secretary of Defense Dick Cheney is expected to propose a much smaller reduction. Still, social activists are mobilizing to fight for their share of the hoped-for windfall.

How should America use these billions of dollars to ease the country's passage through the century's final decade? If you could spend the peace dividend on anything in the world, what would it be? PEOPLE asked a varied collection of tomorrow's leaders, men and women age 30 or under, to turn their thoughts to these questions. This is what they had to say:

Save the Earth by recycling and creating less garbage

Robin Piccone, 28, environmentally conscious Los Angeles designer, creator of the Body Glove swim wear line.

We should put the money into the development of biodegradable products. The idea is not to look for more garbage dumps, but to make less garbage. And we should bring a Just Say No type of program related to pollution into the public schools. Teach children about recycling so they do it as a matter of course, without seeing it as an onerous task, and pass the word on to their parents.

Teach concern for others by aiding developing countries

Carol Hannah, 28, former Denver sixth grade teacher, now a Peace Corps volunteer training primary school teachers in Kasungu, Malawi.

I think foreign aid is very important, and it all relates back to education. If we're ever going to teach children that we need to care about each other, then we need to be caring about other countries.

Communism remains far from dead, so don't assume peace is a foregone conclusion

Capt. Diane Battaglia, 28, West Point graduate, commander of an Army air defense artillery unit at Fort Bragg, N.C.

We need to move with caution and not rush into making big cuts in military spending. Most of us in command situations still see a threat, since [Eastern Europe] is still in flux. True, there have been quite a few moves toward democracy, but in some countries there have also been serious moves against it. Communism should not be discounted, certainly not now, maybe not ever. It may be dormant for a while or it may become unpopular, but I definitely see it coming back around full cycle. It's a very large force, like a religion. There are too many true believers. And we haven't ended all conflicts elsewhere in the world, not by a long shot. The bottom line is that we need a prepared Army.

Build bullet trains like those in Japan to cut traffic and pollution

Fred Savage, 13, star of ABC's The Wonder Years.

I think we should provide more mass transit. You know how in Japan they have the bullet trains? Well, I'd do that all over America. That would cut down on a lot of traffic, and it would cut down on smog and pollution. Fewer and fewer people would use cars, and more and more people would use the trains.

Fight the pervasive, ugly myths about mental illness

Kelly A. McKuen, 27, a schizophrenic and a member of the Project Return Players, an improvisational acting troupe in Santa Monica, Calif., made up of men and women recovering from mental illness.

I'd like to see better education to remove the stigma of mental illness. You never read in the paper about the ex-arthritis patient robbing the bank. But if the person is an ex-mental patient, that's the first thing they write. It's mysterious, it's kind of scary, so they play on it. But most often the mentally ill are victims of crime, not the perpetrators.

There can't be real solutions until we fundamentally change the system

"Dread" Scott Tyler, 24, recent graduate of the School of the Art Institute of Chicago and creator of the controversial work What Is the Proper Way to Display a U.S. Flag?, which invited viewers to step on the emblem.

While the U.S. is still the U.S. and the Soviet Union is still the Soviet Union, both hostile blocs with contending interests, [real change] won't happen. There can't be solutions to problems such as homelessness until you do away with the system that generates them. The interests of governments are different from those of the people. That's the way it is. I don't think we're suddenly going to say black people no longer have to worry about getting beaten up by white cops for walking in the wrong neighborhood. People shouldn't be deluded into thinking this money would be used in the interest of the people.

Help the homeless renovate abandoned buildings

Michelle Shocked, 28, folksinger and former squatter.

I would put the money into the hands of homeless people so they could take over and renovate abandoned buildings. New York City, for example, spends up to $32,000 a year to keep a family of three in a welfare hotel. But squatters have argued all along that for $1,000 they could provide the bare essentials for an abandoned building. For every homeless person in New York City, there is an empty, abandoned space in a city-owned building. So why not put the resources in the hands of the homeless and let them invest some sweat equity by doing the work and fixing up the shelters themselves?

Provide health care and more trauma centers for the poor

Clinton Lindo, 29, chief University of California—San Francisco medical resident at the Veterans' Affairs Medical Center in San Francisco.

Money saved from the military budget could give hope. There are people who don't come to the hospital because they're afraid they can't pay for it. When they don't have insurance, people tend to come to the hospital only after they get to be very sick. Most people involved in things like knifings and shootings are uninsured. The money should also be used to provide more trauma centers at state and county hospitals, which tend to be poorly funded. We can't ask hospitals to take care of patients who don't have money without giving them something in return. Medicine is a business in this country, but everyone should be entitled to some basic standard of health care.

Buy up the remaining wilderness and tropical rain forests

Bill McKibben, 29, author, The End of Nature.

I would like to take a very large lump of the money and buy up and preserve all the remaining wilderness and roadless areas around the country. It wouldn't be as expensive as it sounds. For instance, for about $10 billion, you can take care of most of the wilderness areas in the Northeastern United States. There are other areas around the country that should also be preserved, and we should purchase part of the tropical rain forest as well. The saving of the rain forests will directly result in the improvement of the ozone and the prevention of the scorching of these areas. Ultimately, it will help reduce greenhouse effects on our planet. In actuality, though, I think the Bush Administration will spend only a fraction of the money on the environment. Any budget cuts will be just a small rebate of the obscene sums that we spent on the military under President Reagan.

Fund volunteer programs that help the country's underclass

Anthony Kennedy Shriver, 24, son of former Peace Corps Director Sargent Shriver Jr. and founder of a Washington, D.C.—based program called Best Buddies, which pairs college students with mentally retarded persons.

My emphasis would be to allot funds from defense cuts to develop programs to deal with the underclass, with those people traditionally left out. The Peace Corps, Head Start and VISTA are all programs developed in the '60s. In the '90s, we need to restructure or modify or create new programs with more funding to address the needs of people today. What I hope is going to happen in the '90s and into the next century is the return of people power and the power of the volunteer. We also need to provide funds to bring together the great minds to think about what we need to do and how we can improve existing programs, like a retreat or think tank. We need to give people the time to think.

Give shelter and legal help to victims of domestic violence

Craig Seal, 21, junior majoring in psychology at the University of Santa Clara, Calif.

I think we should establish a large foundation to establish and fund a network of battered women's shelters. The shelters we have today are very limited in the services they provide, and they can't handle the number of women who have been forced to flee their homes. But with enough money, a foundation could acquire property and buildings for shelters and staff each one with paid counselors and workers. I'd also like to see some of the money go to providing affordable, high quality legal assistance to battered women, who always seem to end up on the wrong side of the law, even though they're the ones that have been violated.

Provide incentives for alternative transportation systems

Robert Curtin, 25, production manager at AeroVironment in Monrovia, Calif., developer of experimental vehicles such as the airplane Solar Challenger.

The first thing I'd like to see done is to reduce the deficit. I'd feel better if my country wasn't going into debt. Then I'd like to see the government provide incentives toward developing alternative forms of transportation to help reduce pollution and conserve fuel. Cars powered by methanol or electricity will be feasible in the very near future, and so will more efficient gasoline-powered cars. But there's no financial incentive to produce them right now, because, after adjusting for inflation, gasoline is cheaper than it was before the first energy crisis in the early '70s.

Recruit police officers from within local neighborhoods

Ice Cube, 20, singer and writer for the controversial L.A. rap group N.W.A (Niggers with Attitude).

Better schools. Right now they don't teach you how to cope in society, how to get a job, make money, do a decent job interview, how to raise children. We need better paid teachers. Better facilities. We also need to spend money on programs to recruit cops from the community they patrol. For kids who grow up in the ghetto, the last resort is the police. If something happens, they'd rather retaliate themselves than call in the cops, because the cops can't be trusted. White kids are taught that the police are their friends. Here, if you wear a cap or a certain color, they think you're in a gang and they pick you up. But if the police come from the area they patrol, lotta people care more.

Expand vocational and technical training in public schools

Steve Shorter, 30, assistant principal, Spring Forest Junior High School in Houston.

If world events are going to free up money that can be spent on education, we need to provide it to individual schools that have individual needs. Many young Hispanics, for example, enter school without being fluent in English. More money has to be spent in these areas so they can enter an English-speaking society and function to their full capabilities in the future. Otherwise they will become frustrated and drop out and condemn themselves to being less than they might become. If these kids don't have the skills or interests that will head them into college-bound programs, then technical and vocational training can at least give them a chance to make their lives a little better. They are going to have to work all their lives at frustrating, menial jobs that are going to be continuously endangered, rather than enhanced, by automation and increased complexities in the workplace.

Fight AIDS and drugs, teach sensitivity toward gays

Ray Navarro, 25, New York City video artist and member of the activist group ACT UP (AIDS Coalition to Unleash Power).

It's important to note that many people under 30 are HIV-positive, are infected with the virus that causes AIDS and will not live past 30. My choice for the money would be first to set up a sensible, nationalized health care system. I would also like to see the number of drug treatment slots available increased. People addicted to drugs need treatment, and that means residency programs, methadone maintenance, abstinence programs—whatever is appropriate. As part of sex education, a portion of the money should also go toward sensitivity training about homosexuals. At least 10 percent of kids are gay or lesbian, and as a teenager I found it very upsetting that my sexuality as a gay person was not addressed in sex ed courses. I also think it is really important that kids be taught about safe sex.

Build huge computers for simulating complex experiments

Stephen Wolfram, 30, professor of physics, mathematics and computer sciences at the University of Illinois at Urbana-Champaign and recipient of a Mac Arthur Foundation fellowship.

We could put the money into building huge computers capable of performing extremely complex simulations of important scientific experiments that are otherwise too difficult or expensive to carry out. It would cost about $1 billion to build a computer with a billion processing elements, the kind we need for tasks like testing the wing design of a space plane or studying fluid dynamics to improve the design of cars or artificial heart valves. We could even simulate past natural events like the first seconds after the big bang or the emergence of life on earth from the primordial soup.

Charles E. Cohen and Montgomery Brower, Marie Moneysmith and Michael Alexander in Los Angeles, Linda Kramer in Washington, D.C., and bureau reports