Liberal economist Walter Heller, calling supply-side economics "Laetrile for the cancer of inflation," declared yesterday that President Reagan's program cannot work as planned.

The former chief of the Council of Economic Advisors under Presidents Kennedy and Johnson and the major architect of a tax cut that revived the economy in 1964, Heller called Reagan's proposed economic package "inconsistent, unblanced and too optimistic." Appearing on NBC's "Meet The Press," he accused the administration of being "hooked on the supply-side fairy tale" by kidding itself and the public into thinking that its proposed tax cuts will result in a tremedous outpouring of work effort, savings and investment without increasing demand inflation.

"Nothing in the historical record supports that," he said, noting that studies show people spend 90 cents of every dollar increase in their pay envelope.

Heller credited President Reagan with being a "persuasive communicator," but then added, "You can't end inflation by talking people out of it; you've got to have an anti-inflation program."

The chief executive has often talked of the necessity of lowering inflationary expectation. He has also pointed repreatedly to the salutary effects of the Kennedy-Johnson era tax cut, when there were five years of real growth over 4 percent. Heller, who is now a professor of economics at the University of Minnesota, warned against trying to turn back the clock.

"It is quite a different situation," he explained. In addition to a price stability rather than an inflationary psychology, due to a 1.2 percent annual inflation rate instead of today's 12 percent, there was tremendous slack in the economy. Back in the early 60s there was a gap of 10 percent between potential and actual output; today the gap is 3 or 3 1/2 percent. "To rely on hefty tax cuts and hoped-for budget cuts is a very risky path to take," said the economist.

Instead Heller counseled a slower, more prudent course of action consisting of a reasonably modest tax cut this year to take up the slack in the economy with the rest predicated upon cuts Congress makes in the budget.

If the administration's entire program, including three years of announced tax cuts, were enacted, he predicted the result would be either a fair amount of inflation over very high interest rates. The only way in which 10 percent or 11 percent nominal growth in the GNP could be engineered in conjunction with a tight-money policy, he said, would be a turnover of money going way beyond what has ever happened.

"We'd have to call him Spinning Volcker to asccomplish that. It just isn't going to happen," Heller said referring to Paul Volker, chairman of the Federal Reserve.

Asked how much of the administration's budget-cutting program would actually be passed by Congress, Heller ventured a guess of 50 percent. On the fiscal side, a modest cut to taked effect in July or even in January 1982 would, in his words, be "a plus not a minus" for the economy.

Speaking as an economist, Heller rejected the proposition put forth this week by Rep. Jack Kemp (R-N.Y.), whose Kemp-Roth bill is the core of Reagan's philosophy, that Keynesian theory means economic chaos as usual.

"Keynesian arithmetic is just as good as it always was," Heller said, even though the Carter administration was unable to solve the nation's economic problems.

As for the Reagan program, Heller, speaking as a citizen, ventured the opinion its effect would be to hurt the poor and near poor rather than just trim the fat from the budget. "A balanced program has to look not just at physical investments, like plants and equipment, but at human capital investments, such as health and education."