President Reagan's economic plan, combined with the tight money policy of the Federal Reserve, is likely to worsen rather than to improve the productivity performance of the U.S. economy, economist Lester Thurow of the Massachusetts Institute of Technology said yesterday.

Thurow and two others were presenting papers on productivity written for the Center for Democratic Policy, which has commissioned a series of papers on major policy issues on which the Democratic party should take a position. The authors met with Democratic leaders in Congress as well as with reporters, to tell them what policy recommendations they thought the Democrats should consider.

Arnold Packer, a former assistant secretary of Labor in the Carter administration, and Howard Samuels, a businessman who was in the Johnson administration, agreed with Thurow that today's economic policies were weakening the economy.

"The United States will have to fight inflation with something other than tight monetary policies and slow economic growth if rapid productivity growth is to resume," Thurow wrote. He argued that during a recession firms are less likely to invest in productivity-enhancing equipment, and that as output drops the productivity of those workers who do not lose their jobs also often falls.

Tight-money policies tend to push up interest rates, and so also discourage investment, he said. However, government policies were not responsible for more than a quarter of the slowdown in U.S. productivity growth in the past decade, the economist said. Government could not by itself solve the problem.

But Thurow argued that if Reagan's policies were reversed, the economy would likely perform better. In order to improve the environment for technological change and investment, there should be tax changes to boost savings and the government should run a budget surplus to raise total national savings, he said.

The Reagan tax cut for individuals was not cost-effective, Thurow said, as it would lose a dollar of revenue for every 5 cents of extra saving that it encouraged. Reagan says that people will increase their savings rate after his income tax cuts. Thurow proposed a shift to progressive taxes on consumption, such as a value-added tax, with all savings allowed to be tax free until withdrawn from savings accounts and spent.

He also said that to compete with the Japanese and Germans, the United States must encourage growth industries and in particular must provide financing for new firms to develop, even if that means allowing much higher ratios of debt to capital than usual.

Packer suggested that the government should play a bigger role in encouraging investment in new technology, and said that most of the new developments of the past had been supported by government spending and risk-sharing. Boeing would not have developed the jet engine without a government defense contract, and without the infrastructure of government-financed highways other industry would not have developed as much.

Although the federal government should not try to "pick winners," it could help to "create winners" in the private sector, he said. The United States could help to solve important world problems and lead the way with new technology in the fields of energy, food production, health care education and training, Packer said.

Samuels stressed the need for more spending on education to build up the human capital of the nation. f Productivity Seen Hurt By Plans By Caroline Atkinson Washington Post Staff Writer

President Reagan's economic plan, combined with the tight money policy of the Federal Reserve, is likely to worsen rather than to improve the productivity performance of the U.S. economy, economist Lester Thurow of the Massachusetts Institute of Technology said yesterday.

Thurow and two others were presenting papers on productivity written for the Center for Democratic Policy, which has commissioned a series of papers on major policy issues on which the Democratic party should take a position. The authors met with Democratic leaders in Congress as well as with reporters, to tell them what policy recommendations they thought the Democrats should consider.

Arnold Packer, a former assistant secretary of Labor in the Carter administration, and Howard Samuels, a businessman who was in the Johnson administration, agreed with Thurow that today's economic policies were weakening the economy.

"The United States will have to fight inflation with something other than tight monetary policies and slow economic growth if rapid productivity growth is to resume," Thurow wrote. He argued that during a recession firms are less likely to invest in productivity-enhancing equipment, and that as output drops the productivity of those workers who do not lose their jobs also often falls.

Tight-money policies tend to push up interest rates, and so also discourage investment, he said. However, government policies were not responsible for more than a quarter of the slowdown in U.S. productivity growth in the past decade, the economist said. Government could not by itself solve the problem.

But Thurow argued that if Reagan's policies were reversed, the economy would likely perform better. In order to improve the environment for technological change and investment, there should be tax changes to boost savings and the government should run a budget surplus to raise total national savings, he said.

The Reagan tax cut for individuals was not cost-effective, Thurow said, as it would lose a dollar of revenue for every 5 cents of extra saving that it encouraged. Reagan says that people will increase their savings rate after his income tax cuts. Thurow proposed a shift to progressive taxes on consumption, such as a value-added tax, with all savings allowed to be tax free until withdrawn from savings accounts and spent.

He also said that to compete with the Japanese and Germans, the United States must encourage growth industries and in particular must provide financing for new firms to develop, even if that means allowing much higher ratios of debt to capital than usual.

Packer suggested that the government should play a bigger role in encouraging investment in new technology, and said that most of the new developments of the past had been supported by government spending and risk-sharing. Boeing would not have developed the jet engine without a government defense contract, and without the infrastructure of government-financed highways other industry would not have developed as much.

Although the federal government should not try to "pick winners," it could help to "create winners" in the private sector, he said. The United States could help to solve important world problems and lead the way with new technology in the fields of energy, food production, health care education and training, Packer said.

Samuels stressed the need for more spending on education to build up the human capital of the nation.