Budget director David A. Stockman admitted last April that the Reagan economic program was not working out as intended, and by last summer was dejected because prospects for balancing the budget had all but disappeared, according to an article in The Atlantic Monthly.

According to the article, based on periodic interviews with Stockman over the past year, the budget director acknowledged that "supply-side" economics was just a new name for "trickle-down" policies that favored the well-to-do. "Naive supply siders" did not realize how hard it would be to fulfill the president's economic program, he said.

Stockman told the author of the article, William Greider, an assistant managing editor of The Washington Post, that the administration's initial economic projections were largely guesswork. "None of us really understands what's going on with all these numbers," Stockman said.

Capitol Hill Democrats immediately seized on the Atlantic article, in the December issue. Sen. Gary Hart (D-Colo.), an early, informal entrant in the 1984 presidential sweepstakes, said yesterday that Stockman's role in events of the last year, as depicted in the article, represented "one of the most cynical pieces of performance by a public official perhaps since the Vietnam era."

Stockman's spokesman at the Office of Management and Budget said last night:

"The article creates an impression that is wrong and grossly misleading. From the beginning, Mr. Stockman and others in the administration have been dealing with a series of problems, numbers and economic assumptions that have been open for all to see.

"Although problems and challenges remain, Mr. Stockman is convinced that the program set forward by the president is sound and that it will work." The spokesman said Stockman claimed he was speaking off the record.

According to the article, Stockman agreed to meet with Greider on a regular basis shortly before he became OMB director. Under their agreement, Greider writes, Stockman would "relate, off the record, his private account of the great political struggle ahead. The particulars of these conversations were not to be reported until later, after the season's battles were over . . . ."

Most of Stockman's interviews with Greider were tape-recorded.

According to the article, Stockman felt from the start that he would have to make substantial cuts in the defense budget. Greider quotes Stockman as saying last February:

"As soon as we get past this first phase in the process, I'm really going to go after the Pentagon. The whole question is blatant inefficiency, poor deployment of manpower, contracting idiocy, and hell, I think that Cap's Defense Secretary Caspar W. Weinberger going to be a pretty good mark over there. He's not a tool of the military-industrial complex. I mean, he hasn't been steeped in its excuses and rationalizations and ideology for 20 years, and I think that he'll back off on a lot of this stuff, but you just can't challenge him head-on without your facts in line. And we're going to get our case in line and just force it through the presses . . . . The defense budget in the out-years won't be nearly as high as we are showing now, in my judgment. Hell, I think there's a kind of swamp of $10 to $20 to $30 billion worth of waste that can be ferreted out if you really push hard."

Later in the spring Stockman said the Pentagon had been given "a blank check" in the budget process so far. "I let it go," he said. "But it worked perfectly, because they got so goddamned greedy that they got themselves strung way out there on a limb."

On supply-side economics, Stockman said that the main point was to reduce the top rate of income tax from 70 to 50 percent--"the rest of it is a secondary matter." The Kemp-Roth tax plan for three straight years of annual 10 percent reductions in tax rates "was always a Trojan horse to bring down the top rate," Stockman said.

"It's kind of hard to sell 'trickle down,' Stockman said, "so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply side is 'trickle-down' theory."

The article quotes Stockman as blaming himself for some of the failures he perceived. For example, Greider writes, by May Stockman had concluded that the initial round of budget cuts he had sought--which looked so improbably large at the outset--really weren't big enough. Moreover, the pieces of the president's "economic recovery program" weren't fitting together as well as they should. Said Stockman:

"The defense numbers got out of control and we were doing that whole budget-cutting exercise so frenetically . . . . We should have designed those pieces to be more compatible. But the pieces were moving on independent tracks--the tax program, where we were going on spending, and the defense program, which was just a bunch of numbers written on a piece of paper. And it didn't quite mesh. That's what happened. But, you see, for about a month and a half we got away with that because of the novelty of all these budget reductions."

Stockman told Greider he was disappointed in the way the tax bill developed, particularly because so many special interests benefited from it. "Do you realize the greed that came to the forefront?" in bargaining over the tax bill, Stockman asked. "The hogs were really feeding. The greed level, the level of opportunism, just got out of control."

According to Greider's account, Stockman himself was responsible for the administration's aborted effort to reform Social Security last spring, and although he hoped the political furor it provoked would pass quickly, he took personal responsibility for the episode.

"The politicians in the White House are overreacting," Stockman said at the height of the furor. "They're overly alarmed. Second, there is a serious political problem with it, but not of insurmountable dimensions. And third, basically I screwed up quite a bit on the way the damn thing was handled . . . I was just racing against the clock. All the office things I knew ought to be done by way of groundwork, advance preparations, and so forth just fell by the wayside . . . ."

Looking back at the year's events, Stockman told Greider: "The reason we did it wrong--not wrong, but less than the optimum--was that we say, Hey, we have to get a program out fast . . . . We were working in a 20 or 25-day time frame, and we didn't think it all the way through. We didn't add up all the numbers . . . ."