RONALD REAGAN last week proved himself to be an inept and foolish leader. Americans were all too happy to give Reagan credit for what appeared to be a robust economy, and Reagan was all too happy to accept it. Fifty-nine months of growth, lower taxes, diminished inflation, shrinking unemployment--all was chalked up as the handiwork of the genial fellow in the White House and his band of supply-siders and monetarists.

But Reagan's reputation for leadership was one of the great canards of contemporary politics. True leadership requires educating people about unpleasant truths and leading them towards the difficult policies reality necessitates. From the first, Reagan took the opposite tack, making it sound as if all our woes as a nation could be cured with nary a discomforting turn. He said taxes would only be increased over his dead body. Well, the president is beginning to look a bit pallid about the cheeks. Walter Mondale, someone owes you an apology.

It took Reagan four days after last Monday's historic collapse on Wall Street to speak out in public on the steps he would take to deal with the crisis. While investors and politicians verged on panic and waited to hear from him, Reagan was only able to muster a Hoover-like declaration that the "underlying economy remains sound."

His performance at his Thursday press conference was no improvement. With the nation looking for leadership, Reagan regressed into petty, partisan Dem-bashing. Don't blame me, he said, "the Congress is the one that's in command" of the budget process. (It's also in command of the tax-writing process, but no matter. This is a president who thinks that the Founders having given Congress a role in the budge-writing process is "kind of a stupid setup.") Much like he did before last November's election, he played his hackneyed tune about how 50 years of Democratic "tax, tax, spend, spend" policies are the cause of all our problems. Franklin Roosevelt and Tip O'Neill were responsible for the near-crash. Not him.

Voters didn't buy Reagan's line last year, returning the Senate to the Democrats. No one should buy it now, either. The arithmetic is too simple. Cut taxes, increase defense spending... you'd think the Administration had been submitting balanced budgets to the Congress only to be rebuffed by congressmen eager to spend more money.

If the announcement of a record-setting trade deficit triggered the market collapse, that imbalance was only symptomatic of the more general shabbiness of the American economy. Under Reagan, the nation's debt has soared from $794 billion to $1.9 trillion. American capital has been drained paying off the debt, the only budget item in the Reagan Era to increase at a higher rate than military spending. Foreign money fueled the Reagan Boom, and it was foreign money that, understandably, bailed out as soon as the going got tough.

The president yesterday met with congressional leaders in hopes of hammering out a "budget compromise" that will satisfy nervous investors, foreign and domestic. He entered the session with "no preconditions", which means that at least he won't turn his hearing aid down when the words "tax" and "increase" are mentioned together. It may be too late. Pessimism on Wall Street grew over the weekend, and yesterday the Dow Jones average dropped another 156.83 points--an 8.04 percent decline on top of the massive drop off of the week before.

So far, the collapse mostly has hurt the pocketbooks of big-time investors. But trickle-down theory applies to economic downturns as well as upturns. If the economy grinds to a halt, all will suffer. As the President grows increasingly irrelevant and out of touch with reality, it will be up to the Congress--Republicans and Democrats alike--to pick up the pieces left by Ronald Reagan's incompetence.