Even if President Bush and congressional Democrats reach an agreement on a budget deficit reduction package of $50 billion, it will have only a marginal effect on what is shaping up as an overwhelming economic problem.

Bush may be engaging in wishful thinking when he tells the nation that a $50 billion reduction could be followed by Federal Reserve Board action to lower interest rates and that the two things together "could turn around" the negative psychology of financial markets.

"I do think that a budget agreement is the best antidote to further economic slowdown, because I think it'll result in lower interest rates and a renewed sense of confidence in investment in America, both of which are necessary to guarantee a more robust growth," the president told a group of out-of-town journalists on Sept. 12.

Many in Wall Street and the business community are not impressed by the prospect of a budget agreement -- if, indeed, one can be reached. That's not to say that a reduction of the deficit of at least $50 billion is not desperately needed. Veteran analyst Henry Kaufman says that such a deal "will be helpful" and could stabilize market conditions, especially if there is a commitment to extend the savings for a second and third year.

In the short term, some market experts think that if Bush is successful in jamming a capital-gains tax cut into the budget package, it could give a temporary lift to the stock market. But whether it would be a catalyst for economic growth, as Bush contends, is widely debated.

The bottom line is that a budget-reduction package, even if shorn of smoke and mirrors, barely nibbles at the scope and composition of America's current economic distress. It is almost impossible to get a realistic fix on how much the crisis in the Persian Gulf, coupled with the escalating S&L disaster and other domestic problems, will actually cost the taxpayers next year.

A $50 billion reduction package would still leave a budget deficit of at least $200 billion for fiscal 1991. That's really $300 billion to $325 billion before stealing from the trust funds.

Worst of all, we face this mess while trying to fend off a recession. The financial system -- banks, thrift institutions and corporations -- remains in a fragile condition. Lower interest rates are desperately needed as the debt piles up. But even with a $50 billion deficit-reduction package, the Fed can probably do no more than modestly reduce interest rates: a major reversal of policy isn't likely to happen while war can explode at any minute in the Persian Gulf, throwing all budget calculations out of whack. If shooting starts in the Persian Gulf, add in hot-war costs at $1 billion a day for as long as it lasts.

If there were a protracted stalemate, lending hope for a diplomatic solution, the situation would be less tense. Still, the Fed would find it difficult to lower interest rates significantly: that would further increase the spread between interest here and higher rates abroad, depressing the dollar and dampening the incentive for Japan and Europe to continue to help finance the U.S. budget deficit.

Moreover, in a stalemate, the inflation resulting from an 83 percent increase in the price of crude oil (from the pre-crisis level of $18 a barrel to about $33 now) levies a tax estimated at a $90 billion annual rate on business and consumers. This is working its way through the economy. It will take a satisfactory end to the crisis to bring oil prices back to normal.

But even when the oil crisis triggered by Saddam Hussein is resolved -- hopefully, in a way satisfactory to the free world -- the troubles of the American financial system, weakened by the accumulated Reagan budget deficits, won't evaporate overnight. Nor will the question of declining American competitiveness.

In his Sept. 12 report to Congress, Comptroller General Charles Bowsher cited the "ominous" long-term implications of the budget deficit for the economy: "Only since 1981 have deficits been high enough to increase dramatically the size of the deficit relative to the economy. This explosion of deficit spending has been accomplished by a decline in the U.S. savings rate. Together they bode ill for future investment and economic growth and thus for the future standard of living of the American people."

It doesn't really matter whether the economy is still experiencing positive growth of one-half of 1 percent -- as Treasury Secretary Nicholas Brady suggests -- or a negative growth of that much or more, as many private analysts think. Either way, the economy is laboring, out of breath. This week, the Commerce Department reported that the consumer price index shot up 0.8 percent in August. That's a 10 percent annual inflation rate -- double July's. And the latest trade deficit figure, for July, soared 75 percent to $9.3 billion -- even before the impact of the Gulf problems was registered, reflecting a falloff in exports.

Both of those indicators suggest a deepening of recession.