Treasury Secretary W. Michael Blumenthal said yesterday the Carter administration rejects a shock tactic he described as "the blockbuster theory" as a method of whipping inflation.

Instead, in testimony before a Senate Foreign Relations subcommittee on international economic policy, he called for an austere budget and monetary policy "for several years" as the only practical solution.

"There is no substitute for holding firm, and holding firm for a long time," Blumenthal said. "A blockbuster might be good psychologically, but the fundamental problems of the inflation and the economy lie in long-run, structural policies. You don't solve those (problems) with blockbusters."

President Carter could "go on television and announce a whole series of blockbuster changes, but I'm afraid it's not possible," Blumenthal said.

It's theoretically possible, the Secretary said, "to break the back of inflation, but at the cost of high unemployment and serious distortions in the economy." Among the "blockbuster" tactics that Blumenthal mentioned and discarded were a 2-to-3-point increase in Federal Reserve interest rates and suspension of minimum wage increases.

The suggestion for dramatic, anti-inflation action, comparable in muscle to the successful Nov. 1 dollar-rescue program, came from Sen. Richard Lugar (R Ind.). But Blumenthal said that even if the president were to risk the impact on jobs and distortions in the economy, Congress wouldn't accept such a program.

The austerity program that Blumenthal mapped out includes "tight budgetary policy for several years", and a monetary policy "commensurate" with the fiscal approach for the same length of time.

In another exchange with Lugar, and in his prepared testimony, Blumenthal indicated that he places less reliance on wage-price guideposts to control inflation that on the "fundamentals" of traditional fiscal and monetary policy.

"We do the world a disservice," Blumenthal told Sen. Paul S. Sarbanes (D-Md.), subcommittee chairman, "if we don't get our economic house in order." The President has given that goal "first priority," he added.

Blumenthal said in his view, the United States would do well to follow the shift in many of the Western demoncracies away from "demand management," designed to increase consumption, toward attention to rebuilding the supply side of the economy. Such a policy would give more attention to the investment side of the economy, less to consumer goods.

Election of the Conservative Party, headed by Margaret Thatcher, in Great Britain, Blumenthal said, "to some extent" represents this trend. "I hope we will move in that direction," blumenthal said.

He added, nonetheless, that he "recognizes the need for more growth and that some (U.S. citizens) still get the short end of the stick."

In his analysis of world economic problems, Blumenthal said that the principal concern of rich and poor nations alike is an inflation which "has risen to a dangerous point," and exacerbated by oil supply and price problems.

He lashed out at the 20 percent increase in oil prices put into effect by the Organization of Petroleum Exporting Countries since January. For the industrial world, he forecast an average inflation rate of 8.4 percent this year, compared to 6.9 percent in 1978.

Poor nations without oil to export, he forecast, will have a combined balance of payments deficit this year exceeding $30 billion for the first time since 1975.

He said the U.S. import bill for oil this year would jump to $52 billion, compared to $42 billion last year. But because of a bulge in expected nonagricultural exports, last year's overall trade deficit will be reduced from $34 billion "to about $27 to $28 billion."

The still sizable trade deficit means that the red ink in the U.S. current account (services as well as trade) will run to $10 to $11 billion in 1979, Blumenthal estimated. That's down from $16 billion last year, but far above the level projected before the round of OPEC oil increase. CAPTION: Picture, W. MICHAEL BLUMENTHAL. . . calls for austere budget