The Reagan administration's most urbane and experienced money manager, Donald T. Regan, outlines White House economic strategy and counts on the collective wisdom of Americans to help the US economy escape disaster.
These points emerged from a brisk, one-hour give-and-take between US Treasury Secretary Regan and reporters over breakfast, as President Reagan and his aides grapple with a deeper recession than they had expected.
Highlighting the administration's dilemma are what Mr. Regan called ''raw figures,'' showing that the federal deficit may soar well above $100 billion in each of the next three fiscal years.
''Most Americans,'' he said, ''have had it ingrained in them that a deficit is a bad thing,'' whether personal, business, or government.
The stock market, he noted, tipped down on news of the latest deficit projections, indicating that investors are troubled by that $100 billion figure.
''We have to take the deficit very seriously,'' he said. ''We need to get it under $100 billion and moving down.''
How? There is the rub. Regan said ''there is no firm economic forecast yet,'' on which to base the next steps.
Nonetheless, he said, the priorities seem clear, as President Reagan and his team tackle the 1983 budget, which the White House will send up to Congress next month.
First, said the Treasury chief, comes the search for ''regular'' budget cuts, excluding defense and entitlement programs, such as social security. No one, including Regan, believes that such cuts - falling mainly in social programs - would be enough. As a next step, said Regan, entitlement programs, ''which now take about 33 percent of the budget,'' will fall under the budgetary magnifying glass.
To slice into entitlement programs, of which social security, medicare, and food stamps are among the largest, can be political dynamite.
President Reagan - plus elected members of Congress who have to ratify such changes - are acutely aware of this. Yet ballooning budget deficits may demand cutbacks beyond those already outlined for the current 1982 budget.
After that, said Regan, would come consideration of cuts in the defense budget and possible tax increases, both anathema to the President.
Regan foresees no defense cuts, reflecting President Reagan's insistence that swiftly growing defense outlays be largely shielded from the pruning knife.
As for tax increases, the President favors speeding up deregulation of natural gas, but opposes a windfall profits tax on gas. Such a tax, said Regan, would garner from $10 billion to $20 billion a year for the Treasury.
Will the US Treasury, borrowing in the capital market to finance huge government debts, soak up so much money that interest rates will soar next year and beyond?
To some extent, Regan concedes, interest rates may rise, given the scope of the government's financing needs. But he counts on an increased savings pool in the United States to swell the amount of available capital.
''In 1982,'' he said, ''business will get $10 billion worth of tax cuts.'' On the individual side, the administration expects Americans to save half of their tax breaks, stemming from a 10 percent income tax reduction beginning July 1, 1982.
''I trust the American people to spend their money wisely and to save it wisely,'' he said.
Tax cuts, Regan added, are not the only source of savings available to Americans. Additional savings will come from such new features of the 1981 tax code as the greatly expanded Individual Retirement Account provision.