Even by the mind-blurring standards of the jet age, the shift from the intoxicating high of the AWACS victory to the chilling depths of the current economic woes was a traumatic one for the Reagan administration. A year after the election that brought President Reagan to power, the country faces--as it did under his three rejected predecessors--the gloomy combination of recession and double-digit inflation.

The test for the current government, one far more important to its own and the country's future than any arms- transfer package, is how well it can respond to this overriding economic challenge.

There is a hopeful sign in the readiness of Reagan administration leaders to disabuse themselves of the comfortable cliches that the fast-moving economic forces have rendered irrelevant.

Reagan was the first in his own government to employ the word "recession." Budget director David Stockman quickly acknowledged that a "mid-course correction" was needed, because fiscal and monetary policies were "out of sync" with the changed economic reality. Treasury Secretary Donald Regan admitted that, realistically, one of the president's major goals, a balanced budget by 1984, was "not probable."

But that is just the beginning of the realignment of policy that the developing problem will demand. For the risks of the situation spinning out of control are much greater than anyone in authority still wants to admit.

On the hopeful assumptions offered by administration spokesmen, the recession will be mild and brief, ending next spring. It will last just long enough to take the pressure off inflation and interest rates without causing severe unemployment.

Then, as we start to come out of the slump, the 10 percent personal income tax cut scheduled for July 1 and the outlays from the budgeted increase in defense spending will combine to give the economy a real shot in the arm. Rising federal revenues, if accompanied by continued congressional economies, will move the government toward a balanced budget, thus forestalling a revival of inflation and high interest rates.

Every step of that cheerful scenario is suspect, and, cumulatively, the suspicions are great enough to turn the success story into a scary horror tale.

The recession may not be brief or mild. Weakness has spread from the housing and auto industries all across the economy, from agriculture to heavy industry. Interest rates are falling mainly because the hoped-for boom in private investment is failing to materialize. Private borrowers are holding off, worried about where the economy is headed. Machine-tool orders, a barometer of investment, are way down.

Inflation is not easing. Energy prices, after a long period of stability, are headed upward. Consumer confidence is shaky--and so are major airlines, auto makers and hundreds of local financial institutions.

The recession may bring a bigger wave of bankruptcies. It will certainly burden local and state treasuries and push the federal deficit upward.

Rather than raise other federal taxes and thereby risk undoing the healthy stimulative effects of the scheduled income tax cut, Congress will come under increasing pressure from the president to slash domestic spending. But that kind of Hooverism will put unbearable strains on state and local governments and on the very people who are least able to protect themselves: the unemployed and the working poor. Social tensions could become very serious.

Minimizing the clearly visible risks will not be easy. But two things would help immeasurably.

It would help if the president recognized and stated the inevitability of growing short-term deficits. It would help if he made it clear that he will not pursue the will-o'-the-wisp of a balanced budget by cutting further chunks out of the social safety net and putting greater demands on overburdened state and local governments.

Second, it OP/ED II

David S. Broder: And Now, Back to the Unpleasant Subject . . .

Even by the mind-blurring standards of the jet age, the shift from the intoxicating high of the AWACS victory to the chilling depths of the current economic woes was a traumatic one for the Reagan administration. A year after the election that brought President Reagan to power, the country faces--as it did under his three rejected predecessors--the gloomy combination of recession and double-digit inflation.

The test for the current government, one far more important to its own and the country's future than any arms- transfer package, is how well it can respond to this overriding economic challenge.

There is a hopeful sign in the readiness of Reagan administration leaders to disabuse themselves of the comfortable cliches that the fast-moving economic forces have rendered irrelevant.

Reagan was the first in his own government to employ the word "recession." Budget director David Stockman quickly acknowledged that a "mid-course correction" was needed, because fiscal and monetary policies were "out of sync" with the changed economic reality. Treasury Secretary Donald Regan admitted that, realistically, one of the president's major goals, a balanced budget by 1984, was "not probable."

But that is just the beginning of the realignment of policy that the developing problem will demand. For the risks of the situation spinning out of control are much greater than anyone in authority still wants to admit.

On the hopeful assumptions offered by administration spokesmen, the recession will be mild and brief, ending next spring. It will last just long enough to take the pressure off inflation and interest rates without causing severe unemployment.

Then, as we start to come out of the slump, the 10 percent personal income tax cut scheduled for July 1 and the outlays from the budgeted increase in defense spending will combine to give the economy a real shot in the arm. Rising federal revenues, if accompanied by continued congressional economies, will move the government toward a balanced budget, thus forestalling a revival of inflation and high interest rates.

Every step of that cheerful scenario is suspect, and, cumulatively, the suspicions are great enough to turn the success story into a scary horror tale.

The recession may not be brief or mild. Weakness has spread from the housing and auto industries all across the economy, from agriculture to heavy industry. Interest rates are falling mainly because the hoped-for boom in private investment is failing to materialize. Private borrowers are holding off, worried about where the economy is headed. Machine-tool orders, a barometer of investment, are way down.

Inflation is not easing. Energy prices, after a long period of stability, are headed upward. Consumer confidence is shaky--and so are major airlines, auto makers and hundreds of local financial institutions.

The recession may bring a bigger wave of bankruptcies. It will certainly burden local and state treasuries and push the federal deficit upward.

Rather than raise other federal taxes and thereby risk undoing the healthy stimulative effects of the scheduled income tax cut, Congress will come under increasing pressure from the president to slash domestic spending. But that kind of Hooverism will put unbearable strains on state and local governments and on the very people who are least able to protect themselves: the unemployed and the working poor. Social tensions could become very serious.

Minimizing the clearly visible risks will not be easy. But two things would help immeasurably.

It would help if the president recognized and stated the inevitability of growing short-term deficits. It would help if he made it clear that he will not pursue the will-o'-the-wisp of a balanced budget by cutting further chunks out of the social safety net and putting greater demands on overburdened state and local governments.

Second, it would help if the Congress recognized and stated that its first responsibility, once the recession has run its course, is to recapture the revenue base needed to finance defense and domestic services and close the huge deficit gap.

If the president will acknowledge the need for counter-cyclical fiscal policy today and Congress will recognize that means higher taxes tomorrow, then we may get out of this mess with our shirts on. would help if the Congress recognized and stated that its first responsibility, once the recession has run its course, is to recapture the revenue base needed to finance defense and domestic services and close the huge deficit gap.

If the president will acknowledge the need for counter-cyclical fiscal policy today and Congress will recognize that means higher taxes tomorrow, then we may get out of this mess with our shirts on.