President Raul Alfonsin told a crowd of more than 250,000 people rallying in defense of democratic rule here tonight that he was putting Argentina's badly ailing economy on a "war" footing.

Using his toughest language yet on the state of the economy, Alfonsin told the festive crowd representing a broad range of the country's political spectrum that Argentines could not expect their standard of living to rise this year.

He reiterated that his 16-month-old democratic government would raise taxes, turn over many state industries to private ownership and reduce public sector spending as part of a plan to revitalize the economy, whose devastation he compared to that of postwar Europe or Japan.

"We have inherited a very, very difficult situation," he told the crowd. "We have been stuck with a wobbly economy and a devastated state sector, which means that at the same time we have to work, we have to make the tools to work with.

"We have to take care of the people's needs and at the same time make the economy grow," he said, speaking from the main balcony of the presidential palace in a style reminiscent of the late president Juan Peron. "This is what is called a war economy, and you can draw your own conclusions."

The rally was called by Alfonsin Sunday when in a nationally televised address he disclosed that unnamed civilian "traitors" were trying to court active duty military men to support action against his government.

In weeks leading up to the speech there had been persistent rumors in political circles of trouble brewing in connection with the trial that began Monday of nine former military leaders, three of them ex-presidents, for their responsibility for massive human rights violations.

"Once again, as so many times in the past," Alfonsin said of the unnamed conspirators, "they have tried to strike out not at a government but at the people."

"The people united will never be defeated, and if those political alchemists want to achieve power, let them present themselves at an election and win it if they can," Alfonsin said to a roar of approval.

For many political analysts here, the speech was recognition of just how worried people are about the economy.