SECRETARY of State George P. Shultz waxed eloquent before a House subcommittee last week. "It we are to achieve the kind of world we all hope to see, with peace. Freedom and economic progress, democracy has to continue to expand," he declared. "Democracy is a vital, even evolutionary force. It exists as an expression of the basic human drive lot freedom."

It sounded like they prelude to a dramatic reversal of American foreign policy. A cutoff of military aid to the ruling regime in EI Salvador perhaps, or a severing of U.S. ties with South Africa? No way Shultz was outlining a plan called "Project Democracy." which the Reagan Administration intends to start up as the latest weapon in its ongoing ideological crusade against Communism.

The idea is to have the U.S. help democratic institutions and ideals to flourish in countries where democracy does not currently exist. This would be done by training young leaders and encouraging the formation of labor unions, political parties, free news media, universities and businesses. Administered by the United States Information Agency. Project Democracy is mostly a campaign of ideas.

It sounded well and good, but some of the Senators remained skeptical and not just because the ideological war will cost $85 million in the next two years. "The more we look at this thing, the more nervous I become over it." said one Republican, who accurately guessed that most African and Asian nations would consider the project a foreign intrusion. Shultz replied with patriotic sentiment: "Don't be nervous about democracy, about holding that torch up there." He bolstered his argument by calling the program "critical to our national security" and by promising the CIA would not be involved.

But the cynics remained, which is good, because Shultz never answered the really tough questions. He would not unambiguously assure the panel that the program would be targeted at all non-democratic nations and not just Communist societies. And he skirted the issue raised by a New York Democrat who asked: "Are we prepared to provide help to democrats in such places as South Korea, the Philippine, in such places as Taiwan, where there are governments friendly to the United States, but obviously with little respect for democracy?"

The congressman referred to only three countries, but the question could have been rephrased: instead of spending $85 million to encourage democracy abroad. Why not simply cut back on the much larger number of U.S. tax dollars spent arming and propping up violently repressive, anti-democratic regimes in Guatemala. Haiti, the Philippines, Chile, and various other places?

Another question left unanswered is that of credibility. How many people outside the U.S. will ignore the irony, of American calls for democracy in light of our government's history of engineering the overthrow of democratically elected governments? Although American citizens possess a notoriously short and often severely abridged sense of history, the governments has acknowledged openly its role in overturning democracy in Iran(1953), Guatemala(1954), and Chile(1973). And the rest of the world has not forgotten.

In short a "City on the Hill" leadership effort like Project Democracy is doomed to failure because the message, however noble, will be coming from a messenger whose credibility and authority on such matters simply does not exist outside the Western industrialized nations. The only issue remaining is whether or not $85 million should be spent teaching the administration that when it comes to democratic ideals, actions speak louder than propaganda.