Olympian view of deficits

A big, blinding Senate committee room with Paul Volcker, chairman of the Federal Reserve Board, testifying. The ceiling is 30 feet high; a thicket of movie tripods records the scene; four hand photographers squat on the floor immediately focused on the witness (who sits alone); it's raining outside, giving an incongruous impression of a wood-paneled cave.

Chairman Volcker is a huge man but so well proportioned you forget his height , which is 6 feet, 7. That is the same height as John Kenneth Galbraith, the Harvard economist. Galbraith told me once he met Charles de Gaulle of France, who was also 6 feet, 7. With grim pretense Galbraith told de Gaulle that because of their height they transcended ordinary mortals. Why not? - they had to be better, they were so conspicuous they could not be held to conventional standards. De Gaulle accepted the whimsy with mock gravity. ''Yes,'' he said, ''and you have omitted one thing: These little people - we must crush them underfoot!''

Mr. Volcker now is testifying about deficits. The American budget deficit is a blood-curdling $200 billion and is likely to be the same next year. He talks in an authoritative voice that commands attention. Members of the congressional Joint Economic Committee take turns asking questions. Bankers, builders, and borrowers are complaining about the horrendous interest rates - 12 percent for a home mortgage; could it be that the nation's big budget deficit has something to do with it?

That is the burden of the Volcker testimony. He has a gift for quiet, but here he is impressive: We know what we ought to do, he says quietly, all we have to do is do it. ''The federal deficit,'' in short, ''appears likely to remain at levels, relative to the size of the economy, that are without historical precedent during periods of economic expansion.''

So, yes, he does link the high interest rate with the failure to curb the federal deficit and does it without exclamation points. ''That course implies great hazards,'' he says quietly of the failure to act.

There is a reluctance in America, as I suppose there is in the rest of the world, to raise the amount of money demanded to pay for the goods the public wants. Cut expenditures? - maybe. Sooner or later something must be done, and my impression is that it is needed fairly soon. The problem for many in Congress is to allocate the expense so as not to offend big campaign contributors. Few authorities are satisfied with the allocation now.

There are leaks around the tax structure - what Time magazine called, as long ago as March 12, 1972, ''a persistent refusal by Americans to tax themselves heavily enough to pay for public services.'' The same magazine, 11 years later (March 28, 1983), devoted a cover story to ''Tax Cheating: Bad and Getting Worse.''

My own guess is that before long the United States will adopt the device that's almost universal in Europe, the value-added tax (VAT), which amounts to a concealed national sales tax. It will probably be modified by various benefits and concessions to low-income and poor people. As Mr. Volcker testifies, I estimate the tax, which taxes consumption. America will have an economy next year of $3.5 trillion, of which consumption will account for half or more. Exempt food, health care, and such things: A 10 percent VAT would extract $200 billion a year.

Mr. Volcker's interrogation drones on. What he could do with $200 billion!