PRESIDENT REAGAN'S address on economic policy was, conditionally, a great success -- depending on what comes next. He did, with skill, precisely what he needed to do. He retrieved the budget debate from the rising cacophony of quarrels over specific programs and cuts. He talked about past inflation, and the threat of worse to come. His next step will be the outline of his budget and tax revisions on Feb. 18. If most people consider them to be fair, and reasonable within the terms of Thursday evening's speech, Mr. Reagan will be in an unusually strong position in dealing with Congress.

He laid out a clear and simple theory. Inflation is high because of government spending, he said, and unemployment is high because of heavy taxes. Most of his audience understands perfectly well that there's more to it than that. Don't wages contribute to inflation when they rise rapidly? Of course they do, but Reagan doesn't want to get pushed into an incomes policy. What about oil prices and food costs? Certainly they are adding to inflation. But the White House sees no point in continuing the discussion of the decontrol of oil prices and, as for food, the administration is already at odds with the farmers. Of all the forces that can push inflation up, a large and persistent federal deficit is most directly the responsibility of the federal government.

Above all else, the administration needs to show that it can exercise genuine control -- beginning with its own affairs.If it can do that persuasively, the effects may well be greater than conventional economic analysis indicates. The course of the inflation is being heavily influenced by people's attitudes and expectations. It is reasonable to argue that a successful campaign to balance the budget may change more than the technical workings of the economy.

Mr. Reagan is well aware that his predecessor's predilection toward complicated explanations and complicated remedies only immobilized economic policy. It is not in Mr. Reagan's nature to make that mistake. With the example of Mr. Carter much in mind, the present administration evidently hopes to choose a few simple points and pursue them unswervingly.

Mr. Reagan has a remarkable ability to deliver a sharp message softly. If you only read his address, you probably were left with an impression of harsh urgency and radical purpose. It you heard it delivered, you may also have gained a sense of a concern for equity and for the impact on the many millions of Americans whose lives will be affected by the budget changes ahead. Pulling down that deficit is not, after all, an abstract intellectual exercise like a crossword puzzle. It is not as though even the more dubious programs didn't reach into every community in the country. There was a suggestion in Mr. Reagan's words that he does not propose to make life harder for those who are unavoidably dependent on federal benefits. That is a standard by which he can be legitimately judged as his strategy takes hold.

Who, exactly, are the poor, and how large a part of the American population are they? Those are interesting questions to which we propose to return in this space tomorrow. Mr. Reagan says that it is possible to balance the budget without injury to vulnerable people who have no possible resources other than those to which federal law now entitles them. Mr. Reagan deserves support for his challenge to the traditional uncontrollable budget -- as long as he observes that crucial qualification.