The American economy is expanding much more slowly than either the Reagan administration or its critics had thought possible. Several weeks ago, when the Commerce Department published its first -- and startlingly low -- estimate of the gross national product in the first quarter of 1985, it was greeted by a chorus of hoots and jeers. Everybody confidently predicted that it would be revised upward as soon as more and better data appeared. Instead, it has now been revised downward.

From the beginning of the year through March, the GNP was rising at the extremely modest rate of 1.3 percent a year. If it persists, it's not enough to keep unemployment from rising. It means no improvement in standards of living. Most immediately important, it tightens all the dilemmas of American economic policy in trying to hold the balance between recession and inflation.

While the magnitude of this sudden loss of momentum is a surprise, the reasons for it are no mystery. It is the result, above all, of this country's tremendous trade imbalance and imports that vastly outweigh exports. That in turn is the result of the dollar's excessively high exchange rate -- which leads you by the familiar path of cause and effect back to the real source of the trouble, the administration's budget deficit. For a year and a half, up to last summer, the budget deficit was working in the classic manner to generate a strong economic expansion. But now it's out of control and producing side effects that are both unanticipated and dangerous.

There's another possible reason as well for this dramatic drop in the GNP growth rate. According to the Reagan administration, the great tax cut of 1981 was going to set off a prolonged boom in business investment that would lead the way to highand steady economic expansion. But some economists have been arguing that a tax cut has only a temporary effect on investment. It's beginning to look as though they were right. The sudden acceleration of investment that began in 1983 has been fading for the past year.

If this period of slow growth continues, the management of the American economy is going to become unusually difficult. The adminstration can't apply the standard medicine of larger budget deficits, since the deficits are already too big and are producing perverse effects. Ideally, the right response by the government is to reduce the deficit, but that work is going extremely slowly. Once again, the Federal Reserve Board is the only working part of an economic policy machine that is otherwise jammed and frozen. Once again, it's mainly going to be left to the Federal Reserve to try to keep the economy growing without inflation.