It's been almost a month now since Walter Mondale released his plan to cut the budget deficit by $177 billion by 1989 -- including a tax increase of $85 billion -- and challenged President Reagan to say how he would reduce the flow of red ink.

But the president hasn't felt the need to meet the challenge: with the economy moving along so smoothly -- for the moment -- he pretends that the deficit doesn't even exist.

Reagan speaks only in lyrical terms of the boom for which he claims full credit. "Our own economy is dramatically changed from only three years ago," the president said in a speech last week. "Rewarding hard work and risk-taking has given birth to an American renaissance."

It sounds good, and has plenty of obvious political appeal. Some Democratic politicians think Mondale's candor on the need for tax increases has hurt him, and at least a few local Democratic candidates are dissociating themselves from their national ticket.

But Mondale is right on this issue, and Reagan's willingness to brush it aside is a dangerous deceit. The Democratic candidate is certain to bring it up forcefully in his first debate with Reagan on Sunday, because it provides an opportunity to puncture the Reagan mystique.

As Sen. Charles McC. Mathias Jr., the maverick Republican from Maryland, said in a Foreign Policy Association lecture the other day, the euphoric picture Reagan paints "is far from cost-free, because the nation is gambling that it will later be able to pay the bills now being incurred." Since Reagan's term began in 1981, Mathias pointed out, Congress has had to raise the national debt ceiling nine times, from $935 billion to over $1,500 billion, a two-thirds increase -- and no end is in sight.

Despite Reagan's refusal to touch the deficit issue, there has been an outpouring of deficit-reducing proposals in recent days from diverse sources, all of which call for more drastic cuts than Mondale proposed. And they all carry an urgent warning: the "window of opportunity" to launch a budget-reduction program may be narrow, because of the possibility of the onset of a recession in 1985.

If the economy looks shaky, it will be even more difficult than it is now to persuade Congress that taxes should be raised. "In this connection, a most timely opportunity was lost this year," New York economist Henry Kaufman told the House Ways and Means Committee last week.

Democratic financier Felix Rohatyn, who referred to the deficit as a "financial cancer," warned that the country must put a "fair cap" on the growth of Social Security, Medicare, Medicaid and other entitlement programs, using a "means test" if necessary. "One cannot maintain the fiction that the budget can be balanced by tax increases and military cuts only," Rohatyn said.

Republican financier Peter Peterson argued here last week that no one should pay attention to assurances by the Reagan administration that "we can grow our way out" of the deficits. "If you believe that, I have several Brooklyn Bridges I might sell you," said Peterson, who was Richard Nixon's secretary of commerce.

Peterson, who for the past two years has led a bipartisan appeal by a group of businessmen concerned about the deficit, worries not only about the domestic impact of all the red ink, but about the international ramifications as well, especially the loss of investor confidence and a potential collapse of the dollar.

What is the answer to this basic problem confronting the nation? Kaufman urges a quick and dramatic "up-front" slash in the deficit, by $50 to $60 billion within the next 12 months, recognizing the risk that this would push the economy into a recession. Economic conditions permitting, he would tack on another $25 billion cut the next year.

Perhaps the most comprehensive budget-reduction plan yet produced was put out a few days ago by the Committee for Economic Development, an independent research group of businessmen and educators loaded with blue-ribbon business names long connected with the GOP. The CED urges a combination of expenditure reductions and tax increases that would cut the deficit to $98 billion by fiscal 1987 and to a mere $16 billion by fiscal 1989.

This would require drastic action cutting automatic cost-of-living increases in Social Security to two points less than the present formula calls for; holding military program increases to 5 percent a year for three years; broadening the tax base; increasing excise and user taxes; and disallowing full indexation of income taxes until 1988.

As the CED acknowledges, these would be very hard choices for politicians to make. Reagan hasn't wanted to make any of them, and Mondale has gone only part of the way, unable to commit himself to the changes that need to be made in entitlement programs. But unless we as a nation bite the bullet, the deficit will grow, and the eventual solution of the problem will be more painful.