America needs a new economic agenda. The challenge is to achieve economic strength in an age of unprecedented resouce constraints, stiff international competition and Third World demands for a new international economic order. We can meet this challenge only with a sense of national purpose rarely achieved outside of war.

The times, in short, call for discipline and vision. Unfortunately, the president's first effort, in his Feb. 18 budget, is not encouraging. His "Program for Economic Recovery" repeats the errors of the past and compounds the inequities of the present.

At a time of economic stagnation, the president proposes to transfer significant government expenditures from the civilian economy to the military and run a large deficit to finance a regressive personal tax cut.

The facts speak for themselves. The president's proposed $28.6 billion military spending increase in Fiscal Ear '82 will account for two-thirds of his proposed $45 billion deficit, which will be finannced by government borrowing from potential civilian investment. His 10 percent individual tax cuts are justified by claims they would spur savings and investment. Yet Wall Street analysts have already concluded they will fuel inflation by stimulating consumption and unbalancing the budget even further.

For those who follow the president's record, the pattern is familiar. He starts in one direction and ends in another. When elected governor of California, Ronald Reagan promised to cut spending 10 percent. But it was only six monthes before he fired his finance director and raised spending 10 percent. The next eight years brought three tax increases and an annual spending growth of 12 percent.

Given these deficiencies, what can democrats do? I believe we should respond constructively by supporting both fiscal responsibility and economic strength through technological innovation.

1. Fiscal responsibility : Democrats can cut the budget and support monetary stability without supply-side theology or hurting the needy.

The key will be overcoming powerful special interest pressurs. Is President Reagan willing, for example, to cut Medicaid and Medicare budgets by reducing today's gross overpayments to hospitals? If so, he can both reduce the tax burden and improve medical care for the poor. If not, his cuts will merely shift the tax burden to state and local taxpayers.

The president must give the federal and state governments the tools to control medical costs, empowering them to bargain for reduced rates with specific providers and promote effective, organized health systems.

President Reagan's escalating budget deficit is the Achilles' heel of his economic program, forcing the federal government to continue borrowning at levels that will keep interest rates disastrously high.

It may not be politically popular to defer tax cuts or set military spending closer to the percentage spent by our allies. But such restraint is necessary to reform fiscal policy. It may also be necessary to suggest some form of tax on luxuries or other low-priority private spending. As a people, we are overcommitted to wasteful consumption and must change our values to encourage savings, efficiency and long-term investment. In this respect, balancing the budget is the precondition to controlling the president's military and tax-cut excesses.

2. Economic strength through technological innovation : This nation did not become the world's leading economic power by merely manipulating its money supply. Our strength has been built with the world's most sophisticated tools, and we continue to lead the way toward a new information era in which investment in the products of the human mind replace our past emphasis on resource exploitation.

To meet this callenge, it will not sufficient for the government simply to "get off the back" of business. Our nation, like our major corporations, must practice strategic planning. A new national consensus among business, labor and government will be needed, in which governemnt becomes a partner in the creation of new wealth.

In this respect, Reagan's accelerated depreciation tax cuts for business are flawed. They do not focus on growing industries most under international attack, which write off their equipment in less than five years. And they do not distinguish between those industries that promise high growth and resource efficiency and those that do not.

Instead, we need to support targerted tax cuts and programs already suggested in Congress, which would:

Encourage research and development by industry and universities;

increase our commitment to basic research, especially by NASA and the National Science Foundation;

promote capital formation by young and innovative companies through lower taxes on capital gains and qualified stock options.

We need a second post-Sputnik era to produce more technical personnel, reversing the disturbing trend that sees us produce half as many electrical engineers as lawyers. Last year, Japan graduated 19,000 electrical engineers to our 17,000.

While avoiding Chrysler-type bail-outs, we must substantially improve the efficiency of our older industries. Special efforts will be required to modernize, and make more resource-efficient, our auto, steel and other basic industries. We also ought to develop modern ground transportation, such as intercity high-speed rail. Japan, England, France and Germany are all more advanced in this field. Finally, new information technologies can be combined with energy and utility systems to achieve dramatic cost and fuel savings.

This is but the beginning of a new economic agenda. Nostalgia and naive dependence on tax cuts are simply inadequate. America will be an older 4 percent of the world's population in 20 years. Carving out a role for our country that will be both secure and prosperous is possible, but the task demands a profound change in the way we think and the way we organize our business and governemnt relationships. It is here that Democrats must focus.