EVEN IN A nation that has become numbed to the statistics of prolonged recession, the extent of suffering among American Indians is shocking. Half of the nation's 1.4 million Indians live on reservations, some of which have limited natural resources and others none. They are, by and large, isolated, barren and undeveloped separate entities with virtually no functioning private industry. On the largest of the reservations, the Navajo, unemployment hit 72 percent a year ago, and per capita income fell to $1,700. The birthrate among this population is twice the national average; so are annual deaths per 100,000. Suicide, alcoholism, tuberculosis and diabetes are present at much higher levels than in the population at large. These Indians --our fellow citizens--are the poorest of the poor who have been hurt by federal budget cuts, and for them there is no social safety net other than what Washington provides.

The thrust of the Reagan economic program is to eliminate excessive regulation of business and reduce taxes in order to encourage expansion of the private sector. Federally financed social programs have been cut in the belief that state and local governments and private volunteer efforts will fill the gap. None of this theory is remotely applicable to Indian reservations. Tax incentives won't bring private industry to isolated reservations without roads, sewer systems and public facilities. If such incentives won't move business into blighted areas of New York City, how can they possibly be expected to induce entrepreneurs to set up shop in the Wyoming wilderness. The only private companies interested in investment on the reservations are those that need timber, oil and natural resources, and these blessings are only abundant on about 15 percent of the reservations.

When legal services, subsidized housing, public employment programs, water and sewer grants and similar programs are cut by the federal government, no state or local government picks up the difference for the Indians. They have no tax base themselves, since real estate is generally owned by the tribe and cash income is so very low. Nor are there private employers to hire the displaced CETA workers, or organized community charities to provide emergency assistance. The reservations don't even have the last resource of almost every American community--a few wealthy families with the means and the social conscience to help. And workers cannot easily pull up stakes and head for Houston or San Diego in search of employment without, in fact, destroying a culture, a tribe and a communal economic entity.

Last month, the White House issued an "Indian Policy Statement" replete with encouraging words for tribal governments, exhortations to self-help and directives to study "what actions should be taken to develop a stronger private sector on federally recognized Indian reservations, lessen tribal dependence on federal monies and programs and reduce the federal presence in Indian affairs." This approach may outline a commendable goal, but it presents no realistic plan for addressing the crisis conditions on the reservations. It's a pipe dream, and it's not enough. Men and women of conscience cannot walk away from this desperate poverty truly believing that federal assistance has caused the problem or that General Motors or the United Way will solve it.